Why India’s Next Wave of GCC Growth May Come From Tier-2 Cities

Instead of spending months identifying buildings, designing offices and making large upfront investments, many new GCCs are choosing to begin operations from flexible workspaces almost immediately. The shift reflects not just a change in real estate strategy but also a broader response to an increasingly uncertain business environment.

According to Harsh Lambah, Country Head, India, at International Workplace Group (IWG), speed and flexibility have become central to how global companies approach expansion.

“I think it fits into their strategy in terms of speed of movement coming into a new country,” he says, adding, “Without any capex requirement or large investment from the GCC side, it makes it a win-win situation for all, including the developer, the operator and the tenant.”

The numbers reflect the scale of this change. GCCs accounted for 45.5 per cent of India’s office leasing activity in the first quarter of 2026, while flexible workspace inventory has crossed 100 million square feet, tripling since 2020. Together, these trends signal a growing convergence between India’s GCC boom and the rise of flexible office models.

Behind this shift lies a world that has become harder to predict.

“The uncertainty in the world is a key factor,” says Lambah. “Things are happening so fast. Two years back, nobody was speaking about AI. Today, it’s all about AI.”

As companies adapt to rapidly changing technologies, evolving business models and shifting workforce requirements, committing to large office footprints years in advance appears increasingly risky. Headcount remains one of the biggest cost components for organisations, and workforce plans can change far more quickly than traditional leases allow.

“When your business plans change, you don’t want to be stuck with space that you are paying for but not occupying,” Lambah says.

Flexible workspace operators have effectively removed several layers of complexity that once accompanied market entry. In the traditional model, companies entering India had to conduct extensive location research, identify suitable buildings, appoint contractors and oversee fit-outs before employees could begin work.

“All that is gone now with flex and hybrid operators,” says Lambah, adding, “The space is already available or it is built to suit very fast. All the GCC has to do is approve the plans, move in and plug in their servers and laptops.”

The impact extends beyond speed. Flexible workspaces are also changing how global companies think about scalability and talent access across India.

Instead of limiting expansion plans to established technology hubs such as Bengaluru, Hyderabad, Pune and the National Capital Region, organisations are increasingly evaluating opportunities in smaller cities.

Lambah believes the emergence of Tier-2 cities as viable GCC destinations is being driven by far more than cost savings.

“There is a whole combination of factors,” he says, adding, “There are international airports coming up in Tier-2 cities. There is very good commercial stock and residential stock coming up.”

He points to cities where office infrastructure now rivals that of larger metropolitan markets. Improved connectivity, expanding urban development and a growing talent pool are making these locations increasingly attractive to global employers.

The talent story has become particularly important after the pandemic. Many professionals who relocated to their hometowns during Covid chose not to return permanently to major cities, creating skilled talent clusters in locations that previously sat outside corporate expansion plans.

“There’s a lot of availability of talent also,” says Lambah, adding, “And there is flexibility from local municipal authorities. There’s a whole lot going for Tier-2 cities.”

For GCCs looking to scale quickly, these cities offer something that major metros often struggle to provide: large, contiguous spaces and room for future expansion.

The rise of flexible workspaces is also linked to broader changes in how organisations view work itself. The pandemic challenged long-held assumptions about the importance of centralised headquarters and fixed office locations.

“Covid actually changed the whole world of work,” Lambah says. “It made the head office absolutely redundant.”

Advances in cloud technology and digital collaboration tools have further reinforced the idea that productivity is no longer tied to a single location.

“You don’t have to commute three hours to go and work somewhere and then come back,” he says. “You could be productive anywhere.”

This change in mindset has accelerated the adoption of hybrid workplace strategies across the corporate world. According to Lambah, many of the world’s largest companies now view flexible workspaces as a permanent component of their real estate portfolios rather than a temporary solution.

The competitive landscape reflects that demand. India today has hundreds of flexible workspace operators ranging from local players with a handful of centres to large national and international networks.

As competition intensifies, Lambah believes success will depend on how quickly operators can respond to evolving customer needs.

“The operators that are fast to move, take advantage of the opportunity, connect with GCCs and provide them with the solutions they want will be highly successful,” he says.

Yet growth brings its own challenges. As demand for flexible workspaces continues to rise, the availability of high-quality, compliant commercial buildings will become increasingly important.

For global occupiers, safety, compliance and operational consistency remain non-negotiable requirements, particularly when managing distributed teams across multiple markets.

“I think the availability of good commercial stock and compliant buildings will be fundamental going ahead,” says Lambah.

That challenge, however, reflects the strength of the opportunity. As GCCs continue to expand their presence in India and seek greater agility in an unpredictable world, flexible workspaces are moving from the margins to the mainstream. What was once viewed as a temporary solution is increasingly becoming the starting point for some of the world’s largest companies as they build their next phase of growth in India.