India's global capability centres (GCCs) are increasingly moving into tier-II cities such as Mangalore, Bhopal, and Aurangabad, marking a significant shift from traditional metropolitan hubs. These cities now account for 30-32% of new job postings in the tech sector, according to Sachin Alug, CEO of NLB Services. The rise of nano-GCCs, which are smaller centres with 20 to 100 professionals focused on research and development (R&D) and artificial intelligence (AI), is driving this trend. Vikram Ahuja, co-founder of ANSR, noted that demand for GCCs in tier-II and tier-III cities has increased to nearly 35% of new evaluations in FY25, up from 14.9% in FY24. Despite this growth, 85-88% of new centres are still located in metropolitan areas. The lower commercial real estate costs—up to 50% cheaper—and reduced living expenses in these cities are attractive factors. Additionally, the attrition rate in tier-II cities is lower, ranging from 10-14%, compared to 16-20% in tier-I cities. Policies like Madhya Pradesh's dedicated GCC policy and Karnataka's Beyond Bengaluru initiative are crucial in promoting this expansion. Companies outside Bengaluru can benefit from rental reimbursements and investment subsidies, further incentivizing the establishment of GCCs in these emerging tech hubs.