India’s next digital boom may not be emerging from Bengaluru or Hyderabad, but from the quiet rise of Tier-2 cities where technology talent and infrastructure are converging to create new innovation hubs.
In recent years, cities like Indore, Coimbatore, Surat, and Bhubaneswar have become magnets for startups and global tech firms seeking cost-effective yet skilled ecosystems. This shift marks a major decentralization of India’s IT and AI landscape.
Industry observers note that as AI adoption deepens across sectors — from manufacturing to retail — smaller cities offer both affordability and a young, skilled workforce. The push for regional data centers, combined with government-backed AI parks, is accelerating this transformation.
According to industry estimates, nearly 30% of India’s new AI-focused startups in 2025 were founded outside the top six metros. This trend is being supported by improved internet penetration, cheaper real estate, and remote work models that make decentralization viable.
Beyond startups, universities in these regions are adapting curricula to meet demand in machine learning, cybersecurity, and data analytics, strengthening the local talent pipeline.
Experts say the next decade will define India’s AI geography — with smaller cities becoming “digital multipliers” of national growth. For advertisers, it’s an ecosystem ripe for engagement, as AI service providers, skilling platforms, and data infrastructure players compete for attention.
