Daybreak - What does it take to build a new tech city? Ask Karnataka’s neighbours

Episode Date: February 5, 2026

Karnataka keeps talking about decentralizing tech beyond Bengaluru. Its neighbors are actually doing it.Tamil Nadu, Telangana, and Andhra Pradesh are building tech cities from scratch—tier-2 clusters with land banks, fast-track approvals, and statutory bodies with real power. Major companies are choosing Visakhapatnam and Tirupati over Bengaluru now.The difference? Decision-making authority. Karnataka's development body is stuck in a promotional role while other states hand their institutions the teeth to actually execute. One state makes announcements. The others are laying fiber, clearing land, and signing deals.Southern India's tech map is being redrawn. Just not by the state that started it all.If you have any thoughts on this episode write to us at [e-mail] with Daybreak in the subject line. You can also leave us a comment on our website or the YouTube channel here.Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Ramon, Ganesh, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production. Sita and I are still reeling from the intensity of our first studio recording.

Intermission launches on March 23rd. To get alert, as soon as we release our first video. episode, please follow intermission on Spotify and Apple Podcast or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. For years now, this has been a familiar topic in India's tech conversation. Bangalore is too crowded, too expensive, too stretched. And every few months, there's a new promise that tech jobs will finally start moving out into smaller cities. Most of the time, those conversations stay abstract.

They revolve around policy announcements, investment numbers, or lists of emerging hubs that don't always feel very real. But instead of asking where tech should go next, our brilliant colleague, the Kenrapporteur Muromai, asked a simpler question. Where is it already going and why? And what she found was that across states of southern India, Tamil Nadu, Telangana, Andra, tier two cities of being drawn into the tech economy in ways that may not look dramatic, but are very intentional. And here's the thing. As these shifts are happening, the comparison is inevitable. Where is Karnataka, home to Bangalore, India's most famous tech capital in all of this? It is still struggling to translate its ambition for decentralization into self-sustaining

ecosystems outside the city. So, today's episode is about just that. What it actually takes to make tech work beyond a single metro and why intent alone hasn't been enough. Which brings us to the real question at the heart of this conversation. How are tech cities really built and why are some states getting it right while others are not? And to answer that, my co-host, Snickha, was joined by the reporter who went out and did exactly that. Hi, Munmay, welcome to daybreak. Hi, I'm so happy to be here. I'm glad you joined us.

So, really interesting story to start with. Thank you. Why don't you take us to where it actually begins? You're in Tirupati. We all know it's a temple town. I would have personally never imagined Tirupati having to do anything with tech. So, yeah, tell us. So basically the idea of going to Terrapati came to me when we were discussing the story in our edit meet.

And when I told people that Terupati has a lot of... at least a few tech companies, they were very surprised. And that's when I thought I should actually go there and do some ground reporting. Yeah. I went there and it's true. It is still very much a temple town. That's the first thing you notice when you enter directions to the really big temple. But you also notice things like a Starbucks.

You also notice a studio store. You also notice a really big pantaloons warehouse with a sale going on in it. And you drive a little further in and you see residential projects that have been convinced. converted into tech parks. You can see that these were housing societies at one point. And right now, actual tech companies and smaller BPOs are operating out of them. And a little further away from Therupati, obviously, we have the electronic manufacturing segment. So, yes, it is an ample town, but it is also emerging as a secondary tech city. Right. So, Runway, for someone, you know, who's listening and hasn't really followed this closely, how did India's

tech ecosystem end up centered around these very few cities, right? Like Bangalore, of course. And what really changed, you know, over the course of last few years to make decentralization such an important topic? So this is a question I asked a lot of people in the course of my story. Bored them with it, really. And for the longest time, especially towards the early 90s to the early 2000s, tech, talent, airports, power and policy

was only concentrated in the so-called big cities. It was there in Bangalore and Hyderabad, in Chennai, in Pune. And that was also because a lot of R&D systems were already in place here. And there was a lot of defense manufacturing. So when people wanted to set up IT and software services, it was an easy shift. Because we already had talented people. We already had power.

And we had great land. But as the city started to get a little clogged, as a lot more companies came in, we started facing land shortage. The rents increased, the traffic, anyone who lives in Bangalore knows that it's a huge problem. Also, there was a lot of talent saturation.

And this is, I think, because there are really great engineering colleges in other parts of the country as well. I mean, most NITs are in tier two towns. It didn't seem reasonable for everyone that they had to study in a great college somewhere and then they had to migrate to a big city to move just because the companies

that could afford to hire them couldn't be in their cities. And I think that is where decentralization really began. To get more resources, of course, but to also keep the talent sort of distributed around the country and not just concentrated in certain parts. Understood. Okay. Okay, let's go back to your story again, right?

Once you stepped out of Tirupati and you began reporting from other cities like Horsor and Warangal, how did you realize that this was not a one-off case? Like, what did you see that was so common? common across all these very different cities, right? Okay. So when I take Warangal as an example, Varangal has an IT tower.

They're really proud of it. They have companies like science. They have Tech Mahindra. They have Maori tech. And Horsor obviously has a really big EV manufacturing system, starting from Ather, then Ola Electric, TVS Motors. It also has Foxcon.

I would say that these cities may not be echoing exactly what a Bangalore or a Hyderabad or even a Pune feels like. But they are cities which have their own big companies. They are cities which have, if not primary, then at least secondary offices. They have techies. They have the infrastructure required for them. And they have it at a cheaper rate than the big cities. Right.

Makes sense. Okay. You know, obviously you spoke to a lot of people when you were reporting for the story. You must have come across many of them who are working in these cities, right? Tirupati, Varangas. I'm very curious to know what did you think of their lives as professionals there. Like, what does it really mean to build a career outside a big city? So, I spoke to people who were working in Manglore.

And I spoke to people who are working in maybe Warangal. I spoke to people who were working in Terupati. I think the biggest difference I can see in their lives versus maybe a techie living in Bangalore is that the cost of living is very less for one. Also, they have a lot more work-life balance. The city is a place where they've already grown up. They have a house there.

They have a network already established over there. It's not as cumbersome to travel from one place to another. And they are doing a job they love. Yeah. I can see. And there is quite a generational difference here as well. Because maybe a person who has just graduated would want to go to a big city like Bangalore or Pune or something to maybe experience it.

But what I noticed was that after a few years in people's careers, they did want to go back to their own towns. They did want to settle in a place which they were already known. They wanted to have a life which was a life along with a career. So that was one big difference I noticed. But so most of these people you met, they were originally from these places. It's not like people from other places around the country are moving to these two cities for jobs.

In states outside of Karnataka, yes, most of the people I met were originally from Tirupati or Varangala Hosur. In Karnataka, there are companies which are pushing people to move to Tier 2 cities, which I would actually say defies the point of decentralization because the entire aspect of it was to give opportunities to people who come from Tier 2 cities themselves. So, yes, these were people who were from these cities. Got it. And, you know, after Terupati in your report, of course, you talk about.

all of these states, right? Andra, Tamil Nad, Telangana, they're building a network of tech cities rather than betting on a single one, right? What did that idea of a network begin to look like when you were on the ground? The network, honestly, looks like a big company headquartered in a main city,

like Hyderabad or like Vizek, and satellite units of those big companies located in smaller towns around it, basically. I know that in Karnataka, InfoSys is sort of trying to do the same thing where it has a campus in Mysore. It also has a campus in Hubei Dharvard. But the difference I saw state-wise in Andra and Telagana was that employees in those tier two towns were actually, you know, working on very decisive specific functions.

And they didn't actually feel the need to move to a bigger city just to get more. exposure as opposed to some people I spoke to in Hubeidharvard who maybe wanted to move to Bangalore to advance their career further and things like that. Right. So let's come to Bangalore, right? From what you observed, what do you think makes it so hard for tech activity to kind of move outside of the city? Okay, so this is kind of an administrative issue. The other states that I mentioned in my article, they have bodies like TSI pass. They have Sepcott. They have SEPCOT. They have. guidance Tamil Nadu. All of these are bodies which actually have administrator powers.

They can allocate land to companies. They can develop industrial land by themselves. By contrast, Karnataka has a body called the KDM, Karnataka Digital Economy Mission. It is mostly of a promotional nature. It doesn't have any powers by itself. Even Karnataka's bodies which actually have the power to allocate land, they don't really necessarily have an overarching power to manage the power infrastructure in the place to manage, you know, maybe water. So every minor decision that a company has to take to establish itself in one place has to be routed through Bangalore.

The other companies have district-wise units which sort of make, you know, land allocation and industrial setup a lot easier. Okay, got it. Like, can you give us an example of how this works in, say, for example, Tamilad or Andhrapedish or Telangana. I can give you an example of Horsur. So, a founder I spoke to, I actually quoted him in my story. A founder I spoke to was trying to set up a manufacturing unit in Karnataka.

And he wanted to set it up in, I think, Mysore, all right? And the amount of permissions he had to take and the amount of time it took for him to actually find a suitable piece of land to check if it was actually, you know, legally clear for him to build an industry on it. He said it was a very hectic process. As opposed to somebody, when he tried Tamil Nadu, somebody from the Tamil Nadu government actually approached him, took him to the state, took him to the state, showed him around the different land parcels that were already available.

There was electricity there, there was running water over there, permissions were handled really quickly, and he set up a plant over there already. I think the whole ease of doing business aspect comes into play a lot around here. Got it. Like, you also mentioned in your story, right, like how Anuripadish's decentralization works because it played the long game, right?

and then it's stuck to that. Can you also talk about that a little bit? So in Andhra-Bedish case, actually, this is the state playing a long game. And it begins all the way in 2014 when Undivided Andra was split into Andhra Pradesh and Telangana. At that time, there was an agreement that Hyderabad would remain a shared capital

for both of those states for a decade. So it knew it was going to lose Hyderabad in 2024 and it couldn't rely on the city to bring a lot of industry and to provide it with revenue in perpetuity, which is why Andhra Pradesh started a state-level nodal agency called APIIC. Basically, the firms which come to the state right now get pre-developed infrastructure, whether it is in WISAG, which has the METTEX zone and the pharma city,

whether it's in Anandthpur, whether it's in Thirupati, with its apartment complexes that have now been refurbished into IT parks with its BPO's. basically the setup in Andra right now is that there is land, there are amenities, and all the companies have to do is come in and establish setups over there. Wow, that's quite commendable. Right. Speaking of Hyderabad, right?

Yeah, so it's been leaving Bangalore behind on a lot of things. For example, a lot of big companies, big tech companies are choosing Hyderabad over Bangalore. Can you tell us about how Hydrored. has become established itself as this center of a network of tech cities that you were earlier referring to. So, Hyderabad and Bangalore have always sort of had a competition between themselves. And I would say, like, up till the late 2010s, maybe Hyderabad was losing out a little bit. But if you can see now, the picture has drastically flipped. Like, Hyderabad added about like 41 GCCs over the last year, Bangalore added 30.

So it overtook Bangalore for the first time. Can you tell our listeners what are GCCs in case anybody is not aware? Okay, GCCs are global capability centers. Imagine a company which has its headquarters abroad. It sets up a unit in India and that unit isn't really serving Indian customers per se, but it's also, it is just serving the customers abroad. All it is doing is establishing a setup over here and employing people from here. That would be a GCC.

All the back-in stuff basically. All the back-and stuff basically, yes. Got it. So basically, Hyderabad has a lot of those. And there's Vanguard, there's Netflix, and I'm sure like a bunch of other companies which have been there in the article. I would say that companies are choosing Hyderabad primarily because it costs less to set up there than in Bangal, even now. I mean, the rates are catching up. It is still a really big city.

But that's quite a reason. Also, Hyderabad is at a nodal point in South India. India where it has a lot of easy connectivity to Tamil Nadu, to Karnataka, even to set-ups in Pune in central India. So that's a big reason for it. And as I mentioned in Telangana, there's a huge advantage that the state is working on sort of secondary nodes to the city. The Varangal IT tower, which I talked about, it has about 30 companies over there.

And they're targeting about 25,000 IT jobs there by 2027. There are BPO networks, there are remote serving hubs. There are local skilling pipelines rather than, you know, very distant campuses with no connectivity to the city. So that's kind of how it's functioning more. Okay. When I'm speaking of that IT tower, you mentioned in your story that it employs a whole bunch of people. Now, I wanted you to kind of tell us a little bit about the beyond Bangalore program, which was the Karnataka government's program, right?

to decentralise. How does it compare to Telangana, for example? So the Beyond Bangalore program, basically, the basic difference is that it's an initiative. It's not an authority body. And it's an initiative under the KEDM. Its main focus has actually been pushing companies out of Bangalore instead of pulling companies to tier two cities.

And I think that's a very big differentiating factor over there. One of the people working in KDM, very of the record, of course, told me that you can't make mess. soar into Bangalore with just an infancy, just an enforcers campus over there. Yeah. So, I think right now, while

the mandate of the Beyond Bangalore program is very commendable and while Manglore is trying to sort of set itself up as a Silicon coast as opposed to Bangalore being a Silicon Valley, there are programs happening, there are startups there. It's not like there aren't. But right now

it is sort of mostly working as some, as you know, an announcement platform. Like every time a region is accused of being neglected by a politician or something like that, the KDEMS Beyond Bangalore announces a program over there. I mean, if you've heard of like Priyang Kharge's speeches, he's from Kalburgi. Yes, right? He does talk about developing Kalgburgi into a tech hub multiple times.

So, but I don't really see a lot of movement over there. In fact, for the story, when I came up with the idea, there was talk of me going to Kalburgi and checking out the IT scene over there. Yeah. And then I spoke to my friends and my friends all had the same line to say, why are you going to Kalburgy? There's nothing on the ground. That's kind of the reputation of the place.

Right, right, right. You know, towards the end of your story, you know, you kind of realized that this is actually not the first time that India has tried to decentralize tech, right? And you talk about STPI, which was already a system meant to do exactly that. When did STPI enter the story? and, you know, has it really worked? So, STPII is actually a central government initiative. It comes under the Ministry of Electronics and Information Technology.

And it was established all the way back in 1991. That's when I think the government's, successive government started realizing that we have to take IT outside the metros themselves. They have about 68 centers right now. They are present in tier one, in tier two and tier three towns. and they handle a lot of software exports according to their websites and here's the difference I've seen again I'm not riffing on Karnataka year

but the difference I can see is that STPI gives you concessions on building IT parks it gives you exemptions it gives you duty-free import of hardware under the national products policy startups and the other states have managed to capitalize on it they have actually set up STPI campuses under various districts.

Like, for example, the Terupati STPI which I visited, technically it falls under the Hyderabad STPI. And it works under that note. Now, Karnataka also has STBIs in Manglore and Hubli, in Davangere and in Manipal. And it should have actually worked a lot, especially because Manipal and Manglore, all of them have really great engineering campuses as well.

But in practice, 80 to 90% of the state. States exports still come from Bangalore. So I think you can have central schemes, but you do also need the state to sort of develop infrastructure on them. Got it, got it. Okay. My last question to you, Runmay, I think we're kind of running out of time. And I've already kept you, this is beyond work time now.

Do you think we often misunderstand how tech growth is actually happening in India? Because we end up looking at the wrong sort of signal. So this is something I had to come to terms with while doing the Tech City story myself. And it's even weirder for me because I actually come from a Tier 2 city. And I still tend to misread signals sometimes. So the first thing I did when I went to Tirupati was check out whether it has a Starbucks. Because again, I come with a very Bangalore perspective. And I thought where else would founders and VCs get together?

And there is a Starbucks in Tirupati. It's just 20 minutes away from the Balaji. example, but it's more aspirational than a networking hub. What I saw over there was couples out on dates. What I saw over there was families with a lot of kids, drinking mocha forapachino's overloaded with caramel and on a sugar rush. And there was no laptop inside. Oh, interesting. And the cafes in these cities, the Zudios, the pantaloons, they are not built to pull in techies from big cities over there. They have all showed up over there because local people are getting better jobs and they are earning more money, which arguably is the entire

point of decentralization, right? Like equitable progress for everybody. So whenever government officials or even tech leaders talk about building tech cities outside of like metros, they talk about transforming them a lot. They talk about maybe great infrastructure. They talk about, you know, the social vibe of the city. They maybe talk about getting a bobs bar outside of Bangal or once in a while. Yeah. But when I speak to people, two startup founders from Hubele, from Terupati, from Mysore, all they want is a good job and good money. And I think maybe transforming a city might be the wrong benchmark altogether.

We don't need tier two to look sparkling. We just need people in tier two cities to have jobs. That's such a great thought to end this podcast on. Because, you know, one thing that I really personally detest is how, all cities end up looking the same, you know? And what you're saying is exactly the opposite of that. Right, yeah. So to start, to end where we started with,

Tirupati doesn't have to look like anything other than a temple town. It can be a temple town and it can have an ID park. How lovely is that. That's great. Thank you so much for joining Runmay and it was great talking to you. Before we finish, Do you want to tell our listeners about your next story that you're working on? Maybe tease it a little bit.

Okay, the next story I'm working on is about voice AI startups. Oh my God, is my job at risk? Am I going to lose my job? I definitely hope not because if your job goes, my job goes and I really hate it. So they are getting a lot of funding recently. We see the news about it all the time. I see like news reports saying that voice AI is the next big thing. And my story is maybe going to talk about

is it really the next big thing and what's actually going on with it and why are they getting funded so much and what are they actually doing? Also, can people really tell if an AI agent is talking to them or if it's a human. It's getting harder in order to tell.

But on that note, thank you for tuning in and we will catch you again on Monday. Daybreak is produced from the newsroom of the Ken India's first subscriber-focused business news platform. What you're listening to is just a small sample of a subscriber-only offerings and a full subscription offers daily, long-form feature stories, newsletters and a whole bunch of premium podcasts. To subscribe, head to the ken.com and click on the red subscribe button on the top of the website.

Today's episode was hosted and produced by my colleague Snitha Sharma and edited by Rajiv Sien.