written by Sourish | March 26, 2021

Top 10 Cities for doing business in India

As per the World Bank’s 2020 report on ease of doing business, India is in the 63rd position among 190 countries. India has improved its ranking by 79 Positions in 5 years (2014-2019). The primary reasons for this increase in the ranking were implementing the Insolvency and Bankruptcy Code and Goods & Service Tax. 

Globally, besides China, India is emerging as a new destination for doing business. Development in infrastructure, science & technology, innovation, specialisation in services with a skilled, English-speaking and inexpensive labour force give India an advantage. India is emerging as the new market for Foreign Direct Investments (FDIs). As per UNCTAD’s 2020 world investment report, FDI Inflows hit an all-time high of USD 51 Billion in 2019 with a 20% increase compared to 2018.

Also Read: Tips for Successful Money Management for Profitable Business  

Why are locations essential for businesses?

The location of starting a business always determines its growth & expansion possibility due to access to the right talented employees, raw materials, investors etc. With so much said, If you are considering establishing a business in India, then here is the list of the top 10 cities to do Business in India

1. Mumbai

Starting a business in Mumbai would provide access to finance, a talented workforce & already developed infrastructure.

  • All the established banks have their head offices in Mumbai where businesses can apply for a faster loan (short or long term) processing. 
  • For travelling & connectivity, Mumbai has Chhatrapati Shivaji International Airport, the second busiest airport in India. Mumbai Port Trust and Jawaharlal Nehru Port Trust are the two major ports that help the import & export of goods from India.
  • Mumbai is connected to various National highways, six-lane Mumbai-Pune Expressway, Bandra-Worli Sea Link Bridge which provides extensive road transport facilities.
  • Placement of new talents from institutions like IIT-Bombay, Narsee Monjee Institute of Management, Jamnalal Bajaj Institute of Management & Several other Institutions would provide a qualitative & Productive workforce.
  • However, there are challenges in doing business in Mumbai, such as increasing population, rapidly growing real estate prices, high cost of day to day expenses etc.
  • With challenges come opportunities,  and  being the financial capital of India, Mumbai has solutions to every problem, making it one of the top cities to do business in India. Successful startups started in Mumbai include Quikr, Booksmyshows.com, Nykaa, etc.

2. Pune

Pune is also located in Maharashtra and  close to Mumbai. It is a unique opportunity for  businesses to have a presence in Pune yet access to capital markets, customers, suppliers of Mumbai. 

  • Businesses can be in Pune & can be actively present in Mumbai due to the six-lane Mumbai-Pune Expressway.
  • Since the real estate cost in Pune is not high, businesses can use such low-cost real estates. Pune has excellent road connectivity, which connects to major cities like Bangalore, Mumbai, Goa, and Hyderabad. Pune International Airport located in Lohegaon  approx. 10 KM from Pune city.
  • Major Institutions like Deccan College Post-Graduate and Research Institute, Indian Institute of Science Education and Research, symbiosis international university are located in central Pune, which provides a unique & talented workforce to hire and grow businesses.
  • Tech giants like Infosys, Tata consultancy services, Accenture Solutions provide technology support & other infrastructure readily developed. Maharashtra government schemes to boost FDI in Maharashtra state like MahaParwana (Mega Permission) Scheme have been available for entrepreneurs to start a business in Pune. All these  make Pune one of the major cities to do business in India.

3. Bangalore

  • Bangalore is known as the city of technology or Silicon Valley of India. It is the capital of Karnataka with over 5 million populations, the 3rd highest populated in India. Bangalore is India’s top Information Technology (IT) exporter contributing 1/3rd of total software exports. Some of the major tech giants include Infosys, Accenture, Wipro, Cisco etc. Indian space research organisation is also located in the city of Bangalore.
  • Kempegowda International Airport Bengaluru is the 4th busiest airport in India. Bangalore is connected to Indian railways & National highways, which provides Movement of goods & people.
  • IIM- Bangalore, Indian Institute of Science, National Centre for Biological Sciences, and Jawaharlal Nehru Centre for Advanced Scientific Research are some of the major institutions in the city of Bangalore which provides access to a talented & creative workforce.
  • Some of the leading startups like Urbanladder, Hector beverages, Zoom car started their business in Bangalore. It is well suited for businesses that are dependent on technology. The companies which are not primarily reliant on technology also located in Bangalore to improve their processes & Systems.

4. Delhi

  • Apart from the Capital of the country, Delhi is known for its extreme climates, unlike Mumbai. Delhi was the first state to implement Metro projects; Delhi metro has a network of more than 280 Stations connecting Noida, Ghaziabad, Gurgaon, Faridabad etc. It has an extensive reach of National highways & rail networks. Even though the population in Delhi is close to the Mumbai population but it is not densely populated, making it more accessible to infrastructure.
  • The city has major institutions like IIT Delhi, Jawaharlal Nehru Institutes, New Delhi Institute of Management & Various other institutes known for academic & excellence. Delhi is the home for businesses developing government projects.
  • Many challenges to conducting business in the city are Air pollution, Women safety & Migrant workers. Mass media coverage, Government offices for clearance are beneficial for conducting business in Delhi, making it one of the top cities to do business in India.

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5. Hyderabad

  • Hyderabad is the capital of Telangana state & it is known for the talented workforce & IT culture. Before Bangalore became the technological centre, Hyderabad was a major hub for Information Technology. The city is best known for its pharmaceutical corporations like Dr Reddy’s Lab, Divis Lab.
  • In recent times, Various Biotechnology parks, including Genome Valley, Nano Technology Park, and Fab City, have been developed & established. Tech giants such as Microsoft, Amazon, Bank of America, Facebook have become acquainted with Hyderabad for their business in India.
  • The city of Hyderabad has a lot to offer to businesses, such as a talented workforce, capital, as well as support from the government to establish & grow. Institutions like the Indian Institute of Technology Hyderabad, Tata Institute of Fundamental Research, NMIMS are the notable institutions in Hyderabad that provide the unique opportunity to acquire local talents.
  • Rajiv Gandhi International Airport is located in the city of Hyderabad which provides utility services to business in the movement of goods, Business meetings, and easy reach to any part of the world.
  • Most of the industry is associated with the service industry like pharmaceuticals, biotech, and technology. Hence if your business is in the service industry then Hyderabad would be a good option for you.

6. Chennai

  • Chennai, formerly known as Madras, is the capital of Tamil Nadu. It is the 5th largest populated city with English speaking populations. Chennai is best known for its Auto industry, Approximately 30% of the Country’s auto requirements are fulfilled in Chennai & it is also responsible for the export of 60% of auto from the country. Major car manufacturing companies like Hyundai, Ford, BMW etc, are located in Chennai.
  • Chennai is emerging as the country’s largest car manufacturing along with components. The integrated coach of Indian railways is also manufactured in Chennai.
  • It has a Telecommunication industry as well as the Information Technology industry. Top financial corporations like the standard chartered bank, Citi Bank, World Bank have offices here.
  • Chennai International Airport is located approx. 21 km from the city centre providing mobility of goods as well as people. Chennai Seaport is the busiest in the country which exports automotive & Industrial products.
  • IIT- Madras, Tamil Nadu Open University are some of the major institutions in Chennai. Also, the City has the highest literacy rate of above 80% which makes talent searching an easier process. All these make good reasons for Chennai to be on the list of top cities for doing business in India.

7. Kolkata

  • Kolkata, earlier known as Calcutta, is the capital of West Bengal. Kolkata is considered Gamma city. The recent development in industrialization has been the reason that made it to this list. It is considered as commercial as well as financial of East India. 
  • The significant presence of Information technology growing rapidly provides the MNC’s to come and establish their business to cater to the needs of east India. Well-known companies established are ITC Ltd, Britannia Ltd. Major financial institutions are Bank of India, UCO bank etc. It is also very popular for Jute, Sugarcane, mining & other industries.
  • Netaji Subhas Chandra Bose International Airport located at Dum Dum, serves the Airport needs of Kolkata and it is located approx. 15 Km from the city centre. The port of Haldia has been the major seaport serving the import & export needs of the city.
  • IIT – Calcutta, Indian Institute of Science Education & research are some of the notable institutions in the city which offer fresh talents to complete workforce needs. Since Kolkata is filled with natural resources & living is very inexpensive, the city has attracted various business houses.

8. Indore

  • Indore is the largest city & Commercial capital of Madhya Pradesh state. The major industries in the city are Manufacturing, Automobile, Pharmaceuticals and Textiles. It has an extensive variety of the industry in Industrial components, Manufacturing including Pithampur Special Economic Zone, Sanwer Industrial belt. As per a survey conducted in 2020, Indore is ranked as the cleanest city in India considering various parameters.
  • IIM- Indore, Indian Institute of Science and Technology are prestigious institutions that build talent and creativity for business needs. Being a strategic location between Mumbai & Delhi, it provides your attention to set up the business in IT, Technology, Factory & Middle office operators.
  • Devi Ahilya Bai Holkar Airport located 8km from the city centre principally serves the business needs of Indore as well as the adjacent city.
  • The Indore city is connected to major as well as minor cities connecting Bhopal, Ujjain, Ratlam etc. Also, Indore city is densely connected by the Indian railway which aids the movement of goods as well as people.

Also Read: Best Online Business Ideas to Start with Less Money

9. Ahmedabad

  • It is the largest city, commercial & financial capital of the state of Gujarat. Ahmedabad is developing as a new business hub due to an increase in infrastructure, construction & Significant development in Science and technology. Due to the increase in skilful labour force & financial capital availability, many business houses are considering it as the new home to capture the growing demands of Saurashtra states.
  • This city is best known for its Pharmaceuticals & Chemicals industry as Zydus Cadila & Torrent Pharmaceuticals are located here. The headquarters of the Nirma and Adani group is located in the city.
  • The major requirements of Denims clothes in the country get fulfilled by Ahmedabad. The city is a major exporter of Gemstone & other jewellery. Sardar Vallabhbhai Patel International Airport serves the business needs in Ahmedabad as well as Gandhinagar city. Rail networks connect the city to Mumbai, Delhi, Kolkata and Chennai. State transport buses satisfy the needs of within city travel of workers.
  • IIM-Ahmedabad, Entrepreneurship Development Institute of India, the Mudra Institute of Communications are some of the prestigious & notable institutes in the city which provides a talented & creative workforce for businesses. Ahmedabad is a city of diverse culture along with technological support; the business ideas are worthwhile to start the business in the city.

10. Nagpur

  • Nagpur is the largest city in central India & 3rd largest by population in Maharashtra state. The city is a Commercial, political & financial centre for the Vidarbhas section of Maharashtra. It is very famous for its Oranges, Mangoes, however, there are much more business opportunities available in this city.
  • The Sitabuldi market in Central Nagpur is known as the heart of the city. The city is famous for Synthetic polyester yarn. City also has two thermal stations known as Koradi Thermal Station & Khaparkheda Thermal station which provides power to the city.
  • There are more than 900 MSME's in the Hingana Industrial Estate. The major manufacturing units are the Tractor manufacturing unit of Mahindra & Mahindra, Bajaj Auto group. Dry food manufacturer Haldiram & Ayurvedic products company Vicco is located in this city
  • The city also has a Multimodal cargo hub & Airport which makes it easier for manufacturing entities to establish a business in Nagpur.
  • IIT- Nagpur, IIM- Nagpur are some of the prestigious & notable institutes in the city which trains the best minds for business needs.

11. Surat

  • This large city in Gujarat has a very good prospect for ease of doing business. According to a survey conducted, Surat has the highest GDP growth rate of 11.5% & it will be the fastest-growing city in the world. Surat is also known as the Diamond capital of India where 92% of the world’s diamond are processed & ready for sale. Though most of the polishing & cutting are in smaller stones, businesses are planning to expand their capacity to handle more valuable stone.
  • The other fast-growing industry in Surat is Textile & Silk production. The oldest business in Surat is JARI which has more than 80000 Embroidery machines. The Other industries present in the location are Essar, L&T Engineering & Reliance Petrochemical.
  • The roadways at Surat connect to other major cities in India & New expressway has been constructed. The Surat railway station is one of the major stations in India that connects to other cities & states. Surat Airport is the 2nd busiest airport in Gujarat after Ahmedabad. The city also has a Seaport.

12. Jaipur

  • The city of Jaipur was constructed in the early 17th century & it is one of the oldest ones. The river Banas & Banganga passes through the city. The climate of Jaipur is Hot & Semi-arid climate receiving rain in June & Sept month. The Jaipur is known for its Pre- Modern Architecture & is also known as the Pink city the reason behind this is that the entire city was painted in Pink colour to welcome the visiting Prince of Wales.
  • The major industries in the city are metals & marbles. The city is a predominant centre for Modern as well as traditional industries. Service industries like Genpact, Infosys have their BPO offices in the city. Some famous companies in the city are IBM, Coca-cola, TCS, WIPRO, Tech Mahindra. India’s  largest  IT SEZ known as Mahindra world city is located in Jaipur.
  • Jaipur International airport is the primary airport serving the needs of travel as well as transportation in the city. Jaipur is well connected with integrated roadways as well as Railways connecting the major cities in India.

Choose the city that suits your business

There are many other cities like, Ghaziabad, Noida, Vishakapatnam, which are diverse in their own specific industries. Businesses have to understand the needs of people in their respective cities & support their systems. Many key considerations like products, labour force, raw materials, Customers, market dynamics, challenges in the city have to be considered in arriving at the proper location to set up the business cause it will determine the future growth & prospects of the company.

The existing ecosystem available within the city along with the key capabilities & strength of the company needs to be evaluated for careful considerations. It is advisable to set up a business that suits the local, national as well as international markets. Businesses can set up different business verticals in different cities as per the requirement of the company and explore the best out of available resources. This would also allow the business to have a presence across the top cities for doing business  in India.

Frequently asked Questions

How do you select cities to conduct business?

Businesses need to have a clear idea about the type of resources required, capital that the business seeks, manpower requirements based on their products and services. On the basis of these parameters, businesses should shortlist cities that suit their needs. Select the most cost-effective option. Also, the location should be decided keeping future prospects as it will determine the growth/

Which is the best city for establishing manufacturing units?

For a manufacturing unit, the preferred location would be outside the limit of the city where real estate prices are low and a talented workforce is available. So based on that Chennai, Nagpur or Kolkata would be preferable.

Which is the best city for the information technology sector?

The Silicon Valley of India i.e Bangalore would be best, followed by Pune & Hyderabad due to the availability of infrastructure, capital, resource as well as a talented workforce

Which is the best city for Financial investment advisors or consultants?

Since Mumbai is the financial capital of India, BSE, as well as NSE, are located in Mumbai. It would be a preferable city for Investment advisors & consultants. 

What are the challenges faced by businesses in Mumbai

The foremost problem being faced is the rising real estate prices. The alternative could be to do business in Pune and connect to the city of Mumbai via Mumbai - Pune expressway. The other major challenge is the increase in population which also offers a talented workforce at a competitive cost.

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