Top 10 cities to do business in India

According to the World Bank’s Ease of Doing Business Report 2020, India is ranked 63 out of 190 countries in the world. India has improved its ranking from 79th position in 5 years (2014–2019). The improvement in the ranking is primarily attributed to the implementation of the Insolvency and Bankruptcy Code and the Goods and Services Tax.

Apart from China, India is emerging as a new destination to do business globally. Foreign companies are attracted to do business in India due to improvements in infrastructure, development in science and technology, innovation, skills, English speaking, and a cheap labor force. Due to this India is emerging as a new market for Foreign Direct Investments (FDI). According to UNCTAD’s 2020 World Investment Report, FDI inflows increased by 20% over 2018 to reach an all-time high of $51 billion in 2019.

Why is good space essential for businesses?

The location of any business always determines the growth and expansion potential of the right talented employees, raw materials, investors, etc. If you are thinking of starting a business in India, here is a list of the top 10 cities to do business in.

1. Mumbai

• Starting a business in Mumbai will provide you with financial arrangements, a talented workforce, and an already-developed infrastructure.
• All established banks have their head offices in Mumbai. Where quick business loan (short- or long-term) process can be applied for.
• For travel and connections, Mumbai has Chhatrapati Shivaji International Airport, which is considered to be the second busiest airport in India. Mumbai Port Trust and Jawaharlal Nehru Port Trust are 2 major ports, which help import and export goods from India.
• Mumbai has various national highways, such as the 6-lane Mumbai-Pune Express Highway, connected to the Bandra-Worli Sea Link Bridge, which provides road transport facilities.
• IIT-Bombay, Narsi Monji Institute of Management, Jamnalal Bajaj Institute of Management and several other institutes in Mumbai will provide a skilled and talented workforce.
• On the other hand, many challenges prove to be an obstacle to doing business in Mumbai. Such as an increase in population, rapid rise in property prices, various daily expenses, etc.
• Where there are challenges, there are new opportunities. And since Mumbai is the financial capital of India, it solves every problem. Due to this Mumbai is considered as one of the top cities to do business in India. Successful startups launched in Mumbai include Quicker, BookMyShow.com Nayaka, etc.

2. Pune

• Pune is located in Maharashtra and is close to Mumbai. There is a good opportunity for business enterprises to be located in Pune. One can stay connected with capital markets, consumers and suppliers in Mumbai in Pune.
• Business can be done in Pune, as the Mumbai-Pune 6-line express highway keeps you connected to Mumbai.
• Since property prices in Pune are not high, businesses can be done at low prices. Pune is also connected to many other major cities like Bangalore, Mumbai, Goa and Hyderabad. Pune’s international airport is located at Lohegaon, which is 10 km from Pune city. is far away
• Pune has good colleges and institutes like Deccan College Post Graduate and Research Institute, Indian Institute of Science Education and Research, and Symbiosis International University. Which provides a good and talented workforce.
• The Maharashtra government has released several schemes to promote FDI in Maharashtra, such as the Mahaparvan (mega permit) scheme available for entrepreneurs to start businesses in Pune. All these make Pune one of the great cities to do business in India.

3. Bangalore

• The city of Bangalore is known as the city of technology or Silicon Valley of India. Bangalore is the capital of the state of Karnataka, with a population of 5 million people, making it the 3rd most populous city in India. Bangalore is the top exporter of information technology in India. It accounts for 1/3rd of India’s total exports. Top IT companies like Infosys, Accenture, Wipro, and Cisco are located in Bangalore. The Indian Space Research Organization is also located in the city of Bangalore.
• Bangalore’s Kempegowda International Airport is the 4th busiest airport in India. Bangalore is connected by Indian Railways and National Highways. Which is used for the supply and transportation of goods.
• IIM-Bangalore, Indian Institute of Science, National Center for Biological Sciences, and Jawaharlal Nehru Center for Advanced Scientific Research are some of the major institutes in Bangalore city, which provide a talented and skilled workforce.
• Some of the leading startups like Urban Ladder, Hector Beverages, and Zoom Car started their business in Bangalore. Bangalore is a good choice for technology-based businesses. Companies that are not mainly based on technology are also based in Bangalore and are developing themselves.

4. Delhi

• Apart from being the capital of the country, Delhi is also known for its climate, just like Mumbai. Delhi was the first state in India to launch metro projects. Delhi Metro is connected with more than 280 stations. Like Noida, Ghaziabad, Gurgaon, Faridabad, etc. Delhi is also connected with national highways and railway network. Delhi’s population is close to that of Mumbai, but it is not as densely populated as Mumbai, making it more accessible for infrastructure.
• The city of Delhi is home to IIT Delhi, Jawaharlal Nehru Institute, New Delhi Institute of Management, and various other institutes known for academic excellence. The city of Delhi is considered a home for government project-developed businesses.
• There are many challenges to doing business in the city of Delhi, such as air pollution, women’s safety, and the migrant workforce. National media houses, and government offices for approval are beneficial for doing business in Delhi, making Delhi one of the top cities to do business in India.

5. Hyderabad

• Hyderabad is the capital city of Telangana state and is known for its talented workforce and IT culture. Before Bangalore became the technical center of India, Hyderabad was the main information technology center of India. The city is best known for pharmaceutical corporations like Dr. Reddy’s Lab, and Divis Lab.
• Various biotechnology parks including Genome Valley, Nanotechnology Park, and Fab City have been developed and established in recent times. Tech giants companies like Microsoft, Amazon, Bank of America, and Facebook introduce Hyderabad for their business in India.
• Hyderabad city has a talented workforce, the capital of the state, as well as the government’s support for business start-ups and growth, giving many advantages to the business industry. Indian academic institutes like the Indian Institute of Technology Hyderabad, Tata Institute of Fundamental Research, and NMIMS are reputed institutes in Hyderabad that provide a local talented workforce.
• Rajiv Gandhi International Airport is located in the city of Hyderabad, which proves useful for cargo movement, business meetings, and easy access to any part of the world.
• Most of the industries are related to service industries such as pharmaceuticals, biotech, and technology. So if your business is in the service industry, then Hyderabad will be a good option for you.

6. Chennai

• About 30% of the country’s auto needs are catered to by Chennai and 60% of the country’s auto exports come from Chennai. Major car manufacturing companies like Hyundai, Ford, BMW, etc. are located in Chennai.
• Chennai is emerging as the largest car manufacturing city in India. Indian Railways’ integrated coaches are also manufactured in Chennai.
• Chennai is also home to telecommunication industries as well as information technology industries. The offices of top finance corporations like Standard Chartered Bank, Citibank, and World Bank are also located in Chennai.
• Chennai International Airport is located approximately 21 km from the city, providing cargo handling and transportation facilities. Chennai’s seaport is the busiest seaport in the country, which is useful for the export of automotive and industrial products.
• Institutions like IIT-Madras, and Tamil Nadu Open University are major educational institutes in Chennai. Also, the city has a literacy rate of over 80%, which helps in finding talented employees. All these reasons make Chennai a good choice in the list of top cities to do business in India.

7. Kolkata

• Kolkata was earlier known as Calcutta. It is the capital of the state of West Bengal. Kolkata is considered as the Gamma city. Kolkata is included in this list due to recent developments in the industrial sector. It is considered to be the commercial and financial center of eastern India.
• Due to the remarkable rapid growth of information technology, the needs of MNC companies are being met and they are coming to East India, to start and grow their businesses. ITC Limited, and Britannia Limited were established in Kolkata, and well-known banks like Bank of India, UCO Bank, etc., besides other industries like Jute, sugarcane, etc. are well known.
• The Netaji Subhash Chandra Bose International Airport, located at Dum Dum, caters to transportation needs in Kolkata, 15 km from the city. Far away, Haldia Port is the main port serving the import and export needs of the city.
• IIT Calcutta, the Indian Institute of Science Education and Research are some of the notable institutes in the city, providing fresh talent to meet the workforce needs. Kolkata is full of natural resources and living there is very cheap, hence, the city has attracted various business units.

8. Indore

• Indore is the largest city and commercial capital of the state of Madhya Pradesh. The city’s major industries are manufacturing, automobiles, pharmaceuticals, and textiles. Indore has various manufacturing industries, including various industrial units, the Pithampur Special Economic Zone, and Senwar Industrial Units. According to a survey conducted in 2020, Indore is ranked as the cleanest city in India.
• There are reputed institutes like IIM Indore, and the Indian Institute of Science and Technology, which provide a talented and skilled workforce for business needs. Indore has a strategic location between Mumbai and Delhi, making it attractive for setting up businesses of IT, technology, factories, and central office operators.
• Devi Ahilya Bai Holkar Airport, located 8 km from Indore city, mainly serves the business needs of Indore as well as nearby cities.
• Indore city is mainly connected with smaller cities connecting Bhopal, Ujjain, Ratlam etc. Also, Indore city is connected with Indian Railways which helps in the movement of goods as well as people.

9. Ahmedabad

• Ahmedabad is the largest city, commercial and economic capital of Gujarat state. Ahmedabad is emerging as a new business hub due to the development in the field of science and technology, significant development in infrastructure. Due to increase in availability of skilled workforce and economic capital, many business units are considering Ahmedabad as their new home to meet the growing demand of Saurashtra.
• The city is known for its pharmaceuticals and chemicals industry as Zydus Cadila and Torrent Pharmaceuticals are located here. Nirma and Adani Group are headquartered in Ahmedabad.
• Ahmedabad fulfills the main requirements of denim clothing in the country. The city is an exporter of gems and other jewelry. Sardar Vallabhbhai Patel International Airport serves business needs in Ahmedabad as well as Gandhinagar city. The railway network connects the city to Mumbai, Delhi, Kolkata, and Chennai. State transport buses prove useful for transporting employees.
• IIM Ahmedabad, Entrepreneurship Development Institute of India, and Mudra Institute of Communications are some of the prestigious and notable institutes in the city, providing a talented workforce for industries. Ahmedabad is a diverse city with technological facilities. Ahmedabad City is one of the right options to start a business.

10. Nagpur

• Nagpur is the largest city in central India and the third largest city by population in the state of Maharashtra. The city is the commercial, political, and financial center of the Vidarbha region of the state of Maharashtra. Nagpur city is very famous for fruits like orange, and mango, however many business opportunities are available in this city.
• Sitabuldi Bazaar in central Nagpur is known as the heart of the city. The city is famous for synthetic polyester yarn. The city also has 2 thermal stations, known as Koradi Thermal Station and Khaparkheda Thermal Station. which provides electricity to the city.
• Hingna Industrial Estate has more than 900 MSMEs. Among the major manufacturing units is Mahindra & Mahindra, the tractor manufacturing unit of the Bajaj Auto group. Dry food manufacturer Haldiram and Ayurvedic manufacturer Vicco are located in the city.
• The city also has a multimodal cargo hub and an airport, which helps manufacturing companies set up business in Nagpur.
• IIT Nagpur, and IIM Nagpur are some of the prestigious and notable institutes in the city, which provide manpower for professional needs.

11. Surat

• This huge city in Gujarat has very good business potential. According to a survey, Surat has the highest GDP growth rate of 11.5% and will be the fastest-growing city in the world. Surat is also known as the diamond capital of India. 92% of the world’s diamonds are produced and sold. As most of the polishing and cutting stones are small, industrial units are increasing their capacities and planning for their trade.
• Another rapidly growing industry in Surat is textile and silk production. The oldest business in Surat is Jarino, which has more than 80,000 embroidery machines. Apart from this, Essar, L&T Engineering and Reliance Petrochemical are located in Surat.
• Surat highway connects other major cities of India, and a new express highway has been built in Surat. Surat railway station is a major station in India, connecting other cities and states. After Ahmedabad, Surat Airport is the second busiest airport in Gujarat. The city also has a port.

12. Jaipur

• The city of Jaipur was built in the early 17th century and is one of the oldest cities. Banas and Banganga rivers pass through the city. The climate in Jaipur is hot and semi-arid during the months of June and September. Jaipur is known for its pre-modern architecture, also known as the Pink City. The reason behind this is that the entire city was painted pink to welcome the visiting Prince of Wales.
• The main industries found in Jaipur are metals and marble. The city is a major center of modern as well as traditional industries. Service industries like Genpact, Infosys have offices in the city. Some of the famous companies in the city are IBM, Coca-Cola, TCS, Wipro, and Tech Mahindra. India’s largest IT SEZ Mahindra World City is located in Jaipur.
• Jaipur International Airport is an airport serving the transportation needs of the city as well as travel. Jaipur is connected to major cities of India with the help of Indian Railways along the integrated route.

Select the city that suits your business. There are many other cities like Ghaziabad, Noida, and Visakhapatnam, which are known for their specialized industries. Industrial units should understand the needs of the people of their respective cities and support their systems. A city has to consider many important topics like products, labor class, raw materials, customers, market dynamics, and challenges of the company. Because it will determine the future growth and development of the company.

Companies need to carefully assess the city’s ecosystem based on their capabilities. Before starting a business it is advisable to adapt to the local, national and international markets. Business units can set up different businesses in different cities as per the needs of the company, and find the best out of the available resources. This will allow business units to come to the top cities to do business in India.

Frequently Asked Questions

How do you choose cities to do business?

Business units need to think clearly about the type of resources required, the business demands, and the manpower requirements based on their products and services. Based on these parameters businesses should shortlist cities that suit their needs. Choosing an option keeping in mind the cost. Apart from that the space should be decided keeping in mind the prospects.

Which is the best city to set up manufacturing units?

The location chosen for the manufacturing unit would be outside the city, where property costs are low and a talented workforce is available. So depending on that Chennai, Nagpur or Kolkata will be better options.

Which is the best city for the information and technology sector?

In terms of infrastructure, capital, resources, and availability of a talented workforce, India’s Silicon Valley i.e. Bangalore will be the best after Pune and Hyderabad.

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

Mumbai is the financial capital of India. Also, BSE and NSE are located in Mumbai. It will be a good city for investment advisors and consultants.

What challenges are entrepreneurs facing in Mumbai?

The biggest problem in Mumbai is the rise in property prices. The right option is to do business in Pune and be connected to Mumbai city by Mumbai-Pune Express Highway. Apart from this, another major challenge is population growth. It also offers talented employees at a competitive price.