India's technology investment landscape is undergoing a significant shift, moving beyond its traditional strongholds in the south and west. Tier-II cities are now being positioned as the next major engines of economic growth, according to senior officials from Madhya Pradesh.
Madhya Pradesh's Pitch as a Premier Investment Destination
Chief Minister Mohan Yadav, speaking at the TiE Global Summit in Jaipur, presented Madhya Pradesh as a highly attractive destination for IT, IT-enabled services (ITeS), Global Capability Centres (GCCs), semiconductors, and data centres. He emphasized that state governments have a crucial responsibility to build ecosystems that not only nurture local talent but also integrate it into the state's broader development narrative.
"South India led the IT sector for years. Now the landscape is changing," Yadav stated. He credited this change to proactive, investor-friendly policies and targeted incentives rolled out by states like Madhya Pradesh. To illustrate, he pointed to the hospitality and healthcare sectors, where investors committing Rs 100 crore can qualify for subsidies as high as 30%.
In a significant move for the healthcare sector, Yadav announced a proposed policy where private investors establishing medical colleges will receive substantial government support. This includes 300 beds, doctors, paramedical staff, and medicines provided at the state's expense. Additionally, the government will allocate 25 acres of land for a nominal token cost of just Rs 1.
Tailored Policies for Tech Segments
Elaborating on the state's strategic approach, Sanjay Dubey, Additional Chief Secretary of the Department of Science and Technology, explained that Madhya Pradesh has crafted specific policies to address the unique needs of different technology segments.
For power-intensive data centres, the government is offering a substantial rebate of Rs 2 per unit of electricity. Semiconductor manufacturing units, a key national priority, can avail capital expenditure subsidies of up to 40%, which can be stacked with incentives from the central government. To attract Global Capability Centres (GCCs), the state provides support of Rs 1 lakh per employee per month to facilitate the relocation and retention of skilled local talent.
The Rise of Tier-II Cities and Talent Mobility
Officials highlighted that future expansion in IT and digital services will be increasingly driven by tier-II cities, thanks to advantages like talent availability and a better quality of life. Dubey pointed to a compelling demographic trend supporting this shift.
"Nearly 15% of the workforce currently employed in large metros comes from tier-II towns," he noted. A significant portion of these professionals is eager to return closer to their hometowns, provided they find comparable career opportunities. This reverse migration presents a golden opportunity for states to capture skilled human resources by creating robust local tech ecosystems.
The concerted push by Madhya Pradesh, with its suite of tailored incentives and focus on tier-II city development, signals a new chapter in India's tech story, where growth is more decentralized and geographically inclusive.
