The rise of Southern India’s business service hubs

Over the next five years, India is set to be one of the fastest-growing major economies across Asia Pacific, lead by the performance of its IT and business services. The Southern states of Karnataka and Telangana are at the forefront of this success as they are home to two of India’s most rapidly growing cities and productive cities—Bengaluru and Hyderabad.

As more activity is generated in professional and technological services, we forecast that the employment in these sectors will grow significantly faster than India’s overall labour force. These sectors are also very productive, which is why we expect productivity to be significantly higher in India’s Southern and Western states than the national average, and for it to grow quicker. 

Productivity is one of the main drivers of wages; hence, we anticipate that Southern and Western states will have the fastest growth in real per capita income and therefore consumer spending.