Bengaluru: India’s technology and investment landscape is expanding beyond traditional metropolitan centres, with tier-2 cities such as Tumakuru and Mangaluru emerging as major destinations for data centres, Global Capability Centres (GCCs) and technology-led investments. Union Finance Minister Nirmala Sitharaman highlighted this shift while speaking at the Hero Mindmine Summit 2026 on Monday, underscoring the growing role of smaller cities in the country’s economic transformation.

The minister said India’s technology ecosystem is no longer concentrated only in Bengaluru, Hyderabad, Noida or Ghaziabad. Instead, several emerging urban centres are attracting significant investments as companies look for better infrastructure, skilled talent and lower operational costs.

According to Sitharaman, states across the country are actively competing to attract technology investments and create business-friendly ecosystems, accelerating the growth of new economic hubs beyond traditional metro cities.

Tier-2 cities gaining prominence

Speaking at the summit, Sitharaman pointed to Karnataka’s Tumakuru and Mangaluru as examples of cities benefiting from the rapid expansion of data centres and GCCs.

She noted that technology-driven investments are spreading at a much faster pace than before, creating opportunities in regions that were previously overlooked in favour of major metropolitan areas.

The minister said the response from state governments has been encouraging, with several administrations introducing policies and infrastructure initiatives to attract businesses involved in technology, data management and digital services.

This trend reflects a broader transformation in India’s economic geography, where companies are increasingly seeking alternatives to crowded and expensive metro cities.

Why companies are looking beyond metros

For years, Bengaluru remained the undisputed technology capital of India, housing thousands of startups, multinational corporations and innovation centres. However, rapid urbanisation has also led to challenges such as traffic congestion, rising real estate costs and infrastructure pressure.

As a result, businesses are exploring tier-2 cities that offer comparable talent pools and infrastructure at significantly lower costs.

Industry experts believe that the expansion of GCCs and data centres into smaller cities allows companies to diversify operations while reducing expenses related to office space, employee housing and transportation.

Improved digital connectivity, better road networks and enhanced urban infrastructure have further strengthened the appeal of these emerging destinations.

Mangaluru’s rise as a technology destination

Among the cities highlighted by the Finance Minister, Mangaluru has emerged as one of the most promising technology and investment hubs in southern India.

Located between the Arabian Sea and the Western Ghats, the city and the wider Tulunadu region, comprising Dakshina Kannada and Udupi districts, have long been recognised for their educational excellence, entrepreneurial culture and strong workforce.

The region is home to several reputed educational institutions that produce thousands of engineering, management and technology graduates annually. This steady supply of skilled professionals has become a major attraction for companies establishing technology operations.

Unlike larger metropolitan cities, Mangaluru offers a significantly better quality of life. Residents often describe it as a “15-minute city,” where workplaces, schools, hospitals and recreational facilities are located within short travel distances.

The city also benefits from strong infrastructure, including an international airport, a major seaport, expanding road networks and growing digital connectivity.

Tumakuru attracting fresh investments

Tumakuru is also witnessing increased attention from investors and businesses seeking opportunities outside Bengaluru.

Its proximity to Karnataka’s capital, coupled with improving infrastructure and industrial development, has positioned the city as an attractive destination for technology and manufacturing investments.

Government initiatives aimed at boosting industrial corridors and connectivity have further strengthened Tumakuru’s growth prospects.

Analysts believe cities like Tumakuru can play a crucial role in supporting India’s long-term economic expansion by reducing pressure on metropolitan centres while creating employment opportunities closer to people’s hometowns.

GCCs and data centres driving regional growth

The rapid growth of GCCs and data centres is becoming a major catalyst for regional economic development.

Global Capability Centres serve as strategic hubs for multinational corporations, handling functions such as technology development, research, analytics, finance and customer support.

At the same time, the increasing demand for cloud computing, artificial intelligence and digital services has fuelled investment in data centres across India.

As companies expand these operations, tier-2 cities are emerging as preferred locations due to lower costs, availability of land and access to skilled talent.

The development of these sectors is expected to generate employment, strengthen local economies and encourage further infrastructure investments.

India’s technology footprint continues to expand

Sitharaman’s remarks highlight a significant shift in India’s development story. While Bengaluru continues to remain a major technology powerhouse, the next phase of growth appears to be unfolding across emerging urban centres.

With state governments actively competing for investments and businesses increasingly embracing decentralised growth models, cities such as Tumakuru and Mangaluru are positioning themselves as key contributors to India’s digital and economic future.

As data centres, GCCs and technology firms expand their presence, tier-2 cities are expected to play an increasingly important role in driving innovation, employment and sustainable economic growth across the country.