DPIIT-recognised startups crossed 2.23 lakh by March 2026, generating over 23.36 lakh direct jobs, a 36.1 percent rise from the year before.
Tier 2 and Tier 3 cities now make up 48 to 50 percent of all recognised startups, pulled in by lower costs and stronger internet access.
Chandigarh, Kochi, and Coimbatore show how agritech, fintech, and SaaS hiring is spreading well past the traditional metro hubs.
A few years ago, a software engineer in Coimbatore or Kochi had one real career move: pack up and head to Bengaluru. That calculation has changed. Today, many professionals can find startup jobs without leaving their city as startups build teams beyond India's traditional tech hubs. Many of India's fastest-growing startups are choosing to build outside the metros entirely, and the jobs are following them home.
For years, India's startup story revolved around Bengaluru, Delhi-NCR, Mumbai, and Hyderabad. Founders, investors, and skilled workers clustered in these cities. A startup based anywhere else often had to explain itself. Today, that pattern has started to break down. DPIIT-recognised startups crossed 2.23 lakh by March 2026, generating more than 23.36 lakh direct jobs, a 36.1 percent jump in direct employment over the previous financial year.
This shift took a decade to build. When Startup India launched in 2016, the country had around 500 recognised startups. Ten years on, the program has helped attract nearly Rs 15 lakh crore in private funding, and more than 1.07 lakh recognised startups now count at least one woman director or partner among their founders.
The bigger shift, however, is where these startups are being built. Industry and government estimates put the Tier 2 and Tier 3 share of all DPIIT-recognised startups between 48 and 50 percent. Startup activity isn't confined to a handful of large cities anymore.
The hiring numbers tell a story most people do not expect. The common assumption is that startups mostly hire software developers. Engineers still matter, but the hiring list runs far beyond that.
Agritech startups need field officers, agronomists, customer support staff, and operations teams stationed near farming regions, people who understand local markets and can work directly with farmers. Fintech firms are building out customer onboarding, KYC verification, sales, and compliance roles closer to the communities they serve.
SaaS companies are setting up remote engineering, product, and support teams in smaller cities. This lets skilled graduates land strong jobs without moving to Bengaluru or Hyderabad. For many graduates, that means building a career close to family instead of relocating to a metro. Add designers, marketers, analysts, sales executives, and operations professionals, and the job list keeps expanding as these companies scale.
The ripple effect matters too. Every growing startup pulls in local vendors: logistics providers, training centers, consultants, and technology partners, and all of them hire on the back of that demand.
The next question is why so many startups are choosing these cities in the first place. Cost remains one of the biggest reasons. Office space in many Tier 2 cities runs up to 50 percent cheaper than in the metros, and talent costs come in 25 to 30 percent lower. For a startup watching its runway closely, that gap changes the math. Better internet access and the shift to remote work have made the case even stronger.
A few cities show what this looks like in practice. Chandigarh's tricity region had crossed 633 DPIIT-recognised startups by the end of 2025, with companies like AgNext Technologies, IT Infonity, and DataKund hiring across AI, analytics, and enterprise software. Kochi has built a name in AI work and global capability centers, helped by a sharp rise in Kerala's startup funding through late 2025.
Coimbatore's startup count grew from 271 in 2020 to 1,350 by 2024, with agritech, manufacturing tech, SaaS, and fintech companies hiring locally. These cities are starting to hold onto talent that would have left for a bigger city just a few years back.
Government schemes have helped close some of the gaps founders face outside the big investor networks. The Credit Guarantee Scheme for Startups has backed loans worth more than Rs 755 crore, giving startups capital to hire and expand.
On the Government e-Marketplace, more than 30,000 startups have signed up, and their cumulative orders on the platform have crossed Rs 54,000 crore through FY 2025-26. For a founder building outside Bengaluru, that is real access to customers and capital that used to be far harder to reach.
Some gaps still slow this momentum. Many graduates in smaller cities have strong digital skills but little exposure to roles like product management or growth marketing. Power and internet reliability still vary by region. Venture capital stays concentrated around a handful of metros, and women-led startups, while growing, still hold a smaller share of the overall landscape. How quickly these gaps are addressed will determine whether this becomes a lasting jobs trend or just a temporary surge.
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India's startup story has moved past being a metro-only story. More founders are building outside the big cities, more graduates are finding real jobs closer to home, and more businesses are proving that growth does not have to start in Bengaluru or Delhi to work.
If the trend holds, some of the country's biggest job gains over the next decade could come from its smaller towns, not its biggest cities. What began as a startup movement is gradually becoming a jobs story. For many people in smaller cities, it means finding career opportunities closer to home without having to leave their communities behind.
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Q1. How are startups creating jobs in small towns in India?
Startups are creating jobs in engineering, sales, customer support, operations, marketing, fintech services, and agritech field roles, allowing more professionals to work closer to home.
Q2. Why are startups expanding into Tier 2 and Tier 3 cities?
Lower operating costs, access to local talent, improved digital infrastructure, and remote work capabilities are encouraging startups to build teams outside major metros.
Q3. Which small cities are emerging as startup hubs in India?
Cities such as Coimbatore, Kochi, Chandigarh, Indore, Jaipur, and Bhubaneswar are becoming important startup hubs with growing employment opportunities.
Q4. What role does the Startup India initiative play in job creation?
Startup India supports entrepreneurs through policy incentives, funding access, and business support programs, helping startups grow and generate employment across the country.
Q5. What challenges do startups face in smaller cities?
Common challenges include limited access to venture capital, skill gaps in specialized roles, infrastructure constraints, and fewer networking opportunities compared to metro cities.