Selecting the Ideal City for Your India Satellite Office

India presently hosts more than 55% of all satellite offices or global capability centers (GCCs) in the world, thanks in large part to their highly educated workforce, affordable commercial rent, and strong English proficiency. Today, approximately 1,000 American companies and 700 European companies employ more than 1.6 million people in their India offices. These numbers, already significant, are estimated to grow further by 50% by 2030. The primary sectors pursuing satellite offices in India include financial services, tech, healthcare, and manufacturing R&D. 

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The majority of satellite offices in India are spread across the six major metropolitan centers, while a couple of smaller, tier-two cities have begun to garner more U.S. attention and host many of the newest offices.

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This article explores the benefits and potential drawbacks of these eight satellite office locations. Discover expert recommendations for your new India office based on your industry, the city’s amenities, and your company’s specific needs. 

Location Option #1: Mumbai

What: Mumbai is the commercial and financial capital of India.

Similar to: New York City, NY

Prominent satellite offices in Mumbai: Microsoft, Deloitte, Bank of America, Red Hat, JP Morgan

Home to: 10% of all satellite offices in India.

The Benefits of Choosing Mumbai

With the largest population of all the cities in India, it’s little wonder that Mumbai hosts a wide range of skilled and talented professionals in every industry. Numerous organizations have already identified this safe and accessible center as an ideal place to establish their satellite offices and with good reason.

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The residents of Mumbai boast excellent English skills, which removes a major barrier to opening an overseas office. Not only does much of the population converse in English at work, at home, and socially with an accent Americans find easy to understand, but most of the population is fluent enough to break down the in-depth, industry-specific concepts that are inevitable in any workplace.

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English fluency is just one example of the prevalence of U.S. culture to which Mumbai residents are regularly exposed. As such, social practices and the nuances of the American lifestyle are familiar to them.

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All these factors are at play in the positive relationship that exists between Mumbai and the rest of the world. This vibrant hub is a clear choice for a satellite office and one that your clients, employees, and investors are unlikely to question.

The Potential Drawbacks

The largest cities are often the most expensive. Cost saving is the main benefit of opening a satellite office in India, and Mumbai can still offer this. However, much the same as giant centers like New York, the city’s ample supply of talent, amenities, and office space means that it is the more expensive option.

Competition for talent is another consideration. The fact that many global corporations choose Mumbai as home to their India office highlights the city’s suitability, but it also means many big companies and local businesses are already vying for skilled residents. As such, salaries can range much higher. Additionally, it can be difficult for smaller companies to provide the same influence and benefits promised by Fortune 500 companies already established in the city.

The Verdict

Mumbai offers easy interaction with a fluent workforce in a highly accessible city and an abundance of capable talent. For organizations who consider these benefits worth the additional cost of salaries and rent, India’s largest city remains an excellent choice for a satellite office. Add to this the prestige of working alongside some of the world’s most prominent firms, and companies looking to scale exponentially will find Mumbai an excellent choice of location.

Location Option #2: New Delhi

What: New Delhi (the National Capital Region or NCR) is the capital of India. Nearby Gurugram and Noida are part of the same area.

Similar to: A combination of Washington DC and Chicago, IL

Prominent satellite offices in New Delhi: American Express, PwC, Philips, Lenovo, S&P Global

Home to: 13% of all satellite offices in India

The Benefits of Choosing New Delhi

Like Mumbai, New Delhi offers U.S. firms a highly skilled workforce in every industry. Residents of nearby smaller cities tend to move to the capital for work, and numerous top-ranked schools—including the Indian Institute of Technology and the University of Delhi—prepare the city’s talent pool for the very jobs U.S. companies are seeking to fill.

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Due to this prevalence of talent, New Delhi draws the attention of many high-profile start-ups and global companies seeking satellite offices, as well as prominent local companies. Excellent infrastructure supports this commercial focus, providing accessible transportation and workspace opportunities that are appealing to workers and employers alike.

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The majority of professional candidates in New Delhi converse regularly in English in an understandable accent, though the percentage that uses English as their first language is somewhat lower than in Mumbai.

The Potential Drawbacks

The drawbacks found in Mumbai are echoed in New Delhi, though the cost of salaries and renting office space are slightly reduced. The existence of many significant companies in the capital means similar competition for top talent.

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Another consideration in New Delhi is safety. Crime, especially petty crime, is a concern in India’s capital, and women are the usual targets of these altercations.

The Verdict

New Delhi has many of the benefits of bustling Mumbai, with the added draw of lower rental costs (around 0.50 to $1.00 USD/square foot) and salaries. The capital is highly connected to the rest of the country and the world via excellent air and train transportation.

Location Option #3: Bengaluru (Formerly Bangalore)

What: Bengaluru is known as the Silicon Valley of India; it is the country’s IT hub.

Similar to: San Francisco, CA

Prominent satellite offices in Bengaluru: Google, EY, Cisco, Dell, SAP, Wells Fargo

Home to: 42% of all satellite offices in India

The Benefits of Choosing Bengaluru

Bangalore—now named Bengaluru—is likely to be of interest to technology organizations looking to expand with a satellite office in India. Many of the best tech and business schools in India call this city home. The majority of global tech companies have offices here, in the country’s leading exporter of IT, and it is not surprising that Bengaluru is also the home to many India-based technology companies.

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Bengaluru is certainly worth considering as a satellite office location, and any organization would find itself surrounded by countless successful U.S. and European companies. Until recently, it was widely considered the “safe” choice.

The Potential Drawbacks

High turnover rates are common to India’s work culture as a whole, and it is a factor that U.S. firms need to consider and mitigate where possible. However, this issue is perhaps the most significant in Bengaluru, thanks to extensive competition with the large, global corporations that are establishing their India offices in the area.

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Bengaluru is also known for heavy traffic, with workers facing up to a two-hour commute to work each morning. The city also sees extensive rainfall—annual averages of nearly 1000 mm—which compounds the public infrastructure issues. This factor understandably makes remote work appealing, so organizations planning to establish a physical base of operations are likely to find a less-costly city preferable.

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Corporations are not the only players planning to depart the tech center. Through interviews with potential talent, we have learned that many professionals are choosing to relocate to cities with better infrastructure and lower cost of living. 

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Further, newcomers often find it difficult to adjust to the unique language and culture of the city. The loss of current talent and the unease of new ones serve to intensify Bengaluru’s turnover problem. It also gives rise to deception in talent applications for remote jobs, with hopefuls claiming to live in Bengaluru to receive the high salaries, but, in actuality, residing in much less costly cities.

The Verdict

Due to the reasons outlined above, we recommend that our clients look to other, more suitable cities for their new satellite offices, unless some feature exclusive to the tech hub makes it the indisputable best choice.

Location Option #4: Hyderabad

What: Hyderabad is becoming the alternative for firms seeking all the benefits of Bengaluru without the drawbacks.

Similar to: Austin, TX

Prominent satellite offices in Hyderabad: Qualcomm, KPMG, Oracle, IBM, Goldman Sachs, ADP

Home to: 16% of all satellite offices in India

The Benefits of Choosing Hyderabad

Many of the corporations and much of the talent departing Bengaluru is finding a welcome home in Hyderabad, thanks to the desirable lifestyle that stems from better infrastructure and a more affordable cost of living.

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More and more global and local companies are taking advantage of Hyderabad’s disposition, which is eagerly welcoming and, thus, retaining the skilled workers pouring in from beyond its city limits.

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Local talent is also plentiful, in large part due to the city’s educational excellence. The Indian School of Business is a recognized institution, boasting impressive statistics such as a 100% employment rate after three months for MBA grads in 2021—10% higher than Harvard MBAs.

The Potential Drawbacks

While the benefits of choosing Hyderabad are many and varied, it is true that the booming metropolis may not be the perfect location for every U.S. satellite office. The majority of talent centers around technology and healthcare; though finance and banking professionals can be found, the larger cities retain a much greater share of these individuals. 

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Companies in finance and accounting can still build a great team in Hyderabad, but the development of their satellite offices may require more patience and time.

The Verdict

Organizations looking to reap the many benefits of a satellite office in India will no doubt find great promise in Hyderabad. At this time, tech companies are the best positioned to see speedy, impactful development here, and the city should be especially enticing for those hoping to avoid the hefty costs of the larger centers.

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Whatever the industry, our team highly recommends Hyderabad to clients who previously set their sights on Bengaluru or Chennai.

Location Option #5: Chennai

What: Chennai is the center of innovation for manufacturing and healthcare in India.

Similar to: Philadelphia, PA

Prominent satellite offices in Chennai: Ford, Accenture, Citibank, Verizon, Siemens, Ericsson

Home to: 8% of all satellite offices in India

The Benefits of Choosing Chennai

After the higher cost of the previous cities, the lower cost of living, commercial rent (approximately 50% lower than Mumbai), and salary ranges in Chennai are likely to spark interest in American firms. Add to this a promising telecommunications and transport infrastructure and a dedication to continued improvement on this front, and the manufacturing powerhouse can seem quite appealing. 

The Potential Drawbacks

Though Chennai was once a bustling hub, more recently it has fallen behind larger centers like Bengaluru and Hyderabad, and even Ahmedabad is poised to surpass Chennai’s economy. As such, there is less industry variety available to U.S. companies looking to expand.

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Chennai is another city that, unlike Hyderabad, is not known for welcoming professionals moving there from elsewhere in India. Like Bengaluru, non-domestic talent has a tendency to stay only long enough to gain the experience they need, before moving on to another city. Because fewer professionals are choosing to come to Chennai, firms opening satellite offices there do not get the same access to country-wide talent.

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Other issues, including an accent many Americans find difficult to understand, leave Chennai as one of the less promising satellite office locations in India.

The Verdict

Companies seeking to establish a manufacturing R&D center in India will find great success in Chennai. However, we suggest that other industries that find some aspects of Chennai enticing will be better served pursuing a satellite office in Hyderabad.

Location Option #6: Pune 

What: Given its proximity to India’s largest city, locals refer to Pune as “Mumbai without its problems”.

Similar to: Seattle, WA

Prominent satellite offices in Pune: Credit Suisse, CGI, Salesforce, Barclays, Deutsche Bank

Home to: 10% of all satellite offices in India

The Benefits of Choosing Pune

For organizations looking to launch their tech or financial services satellite office in a well-rounded locale, Pune is worth considering. The city’s collection of quality educational institutions and local companies have made it into a “jack-of-all-trades,” drawing talent and companies across a wide range of industries.

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Pune boasts a host of newly minted professionals eager to start their careers. Though the universities are not of the caliber seen in places like Mumbai and Bengaluru, they and their graduates are held in good regard, and the local and foreign companies making their homes in the city are respectable potential neighbors.

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Though Pune’s IT industry doesn’t match up to that of Hyderabad or Bengaluru, it is generally considered satisfactory. Likewise, the financial services field doesn’t equal the expertise of Mumbai or New Delhi, but it is certainly competent. The city’s second-tier status is all the more acceptable thanks to the cost-savings aspect. It is significantly cheaper to live and run a business in Pune than in the larger centers.

The Potential Drawbacks

Pune’s distributed focus makes it approachable but limits the saturation of any one expertise. Therefore, if the goal is to open a satellite office in the midst of the biggest names in the industry, Pune is not the right fit. For industries outside of tech and financial services, specifically, other locations will provide much more benefit.

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While Pune is home to many capable, well-educated new graduates who make excellent hires, sourcing management in this city will be a challenge—the vast majority of companies choose Mumbai, New Delhi, or Bengaluru to host their head offices. As such, this is where senior-level professionals congregate.

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These roadblocks are likely to make it hard to convince investors and company leaders to accept Pune as a satellite office location. Generally, top decision-makers are more willing to select major centers with clear, proven value for their industry.

The Verdict

If value is the primary deciding factor for location and the intention is to hire primarily candidates with one to two years of experience, Pune could be the ideal city for launching a satellite office. Decision-makers willing to take risks with the possibility of bigger rewards down the line could be amenable to the unproven potential of this multi-faceted city.

Location Option #7: Ahmedabad

What: Ahmedabad is one of the fastest-growing cities in India, poised to become a much bigger player than it currently is.

Similar to: Boston, MA

Prominent satellite offices in Ahmedabad: Citrin Cooperman, Emerson, IBM, Bank of America

Home to: less than 1% of all satellite offices in India, but quickly increasing

The Benefits of Choosing Ahmedabad

A safe city with excellent infrastructure, Ahmedabad is well-positioned to become the next major center for American firms, especially those in the financial sector. The city possesses the most accountants per capita (after Mumbai and New Delhi) and is home to excellent universities, which will support the need for new talent as Ahmedabad’s global appeal grows. 

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The price of launching a satellite office in Ahmedabad is significantly lower than in other cities, both in terms of salaries and administrative costs, and this is bolstered by government incentives. The city also has the best retention rate of all the aforementioned locations, providing further cost savings by reducing the need to regularly train new hires. This staying power is due in part to a surge of professionals returning to their home city after honing their talent in Mumbai or Bengaluru.

The Potential Drawbacks

As always, the many benefits of Ahmedabad should be weighed against some potential negatives. Fewer international flights make the city less accessible, as can English proficiency. Though professionals here are more than capable of day-to-day interactions, English is not the first language for people in Ahmedabad, and this can make some communications more difficult.

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New and mid-level talent is plentiful (and increasing) in Ahmedabad, but staffing large teams will take more time than in the larger cities. Hiring for director-level positions, in particular, will require patience—senior management is available, but not abundant.

The Verdict

American firms in the financial sector could find great success in Ahmedabad if decision-makers are willing to prioritize better value and future growth in lieu of cities with proven success. Ahmedabad’s new status as a satellite office contender could give your organization a unique chance to capitalize on an early-stage opportunity.

Location Option #8: Jaipur

What: Much like Pune is to Mumbai, Jaipur might be described as a smaller, up-and-coming New Delhi and is one of the fastest-growing cities in North India.

Similar to: Denver, CO

Prominent satellite offices in Jaipur: EY, Oracle, Salesforce

Home to: less than 1% of all satellite offices in India, but quickly increasing

The Benefits of Choosing Jaipur

Much like Ahmedabad, Jaipur is positioned to be one of the next major hubs in India, and a number of significant companies have seen this potential and opened satellite offices in the city. A reputation for being a good place to live has prompted professionals from nearby cities to move to Jaipur, making talent acquisition increasingly straightforward.

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Likewise, educated and experienced individuals are departing New Delhi for the safer living conditions in Jaipur, which is near enough for those born and raised in the larger city to still regularly visit their families. Jaipur is also the least costly city on this list. 

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As a major tourist destination, the city is familiar and comfortable with people from outside their borders, whether they come from elsewhere in India or overseas. All these factors combine to create excellent retention in Jaipur, which further increases cost efficiency.

The Potential Drawbacks

Jaipur shares the potential negatives of Ahmedabad, due to its untested status as an international hub of industry. Residents have good English-speaking skills, though not as robust as other cities, and Jaipur is less internationally connected than the larger centers.

The Verdict

While Jaipur, like Pune and Ahmedabad, is not as “safe” a satellite office location as cities like Mumbai and New Delhi, the potential for growth and the benefits of “getting in on the ground floor” could overtake the risks for organizations looking to cut costs and build an entry- and mid-level office initially.

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In conclusion, all of the cities outlined above have benefits and drawbacks that every organization planning their satellite office in India should take into consideration. Numerous factors come into play in this decision, and this overview cannot cover every aspect of what makes a location the perfect choice for each industry or company.

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Establishing a satellite office calls for considerable analysis. Beyond immediate set-up costs and talent acquisition, it is vital to contemplate the long-term vision of your company when choosing a location. Budget is a necessary consideration, but so too is a deep breakdown of your organization's strengths and weaknesses, hiring requirements, and comfort with risk. 

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The preference of your stakeholders is another essential part of the equation. While some investors and clients will applaud your recommendation of a high-risk, high-potential city like Ahmedabad or Jaipur, others will balk at these precarious, aggressive selections and instead endorse plans that highlight the uncontested success of companies with offices in Mumbai or New Delhi.

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This is where June15 Consulting is invaluable. Our familiarity with use cases and case studies from all these cities informs our recommendations and makes us singularly qualified to help your organization select an ideal location. Drawing on this expertise, we can factor in your company’s unique challenges and preferences to present the city that best suits your current needs and growth goals.

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