Top Emerging Indian Cities Series: Vadodara

Three-Part Series: Top 3 Emerging Cities in India; 3

When ventures start looking for areas to expand internationally, they tend to focus on the largest markets. However, in some countries, that may not be your best market entry bet. In India, its largest Tier 1 cities come with their fair share of challenges, such as over population, inadequate infrastructure, pollution, poor public transportation, and long commutes. If you’re looking to expand to a large market with less challenges seen by the congested and trendy areas, it would be worth your time to explore India’s top Tier 2 and 3 cities first. Vadodara, as one of the fastest growing cities in India is a great candidate for your business expansion.

Tier 2 and 3 cities are worth the consideration, especially as connectivity increases between each city and their economic activity continues to grow. These places come with great benefit, such as less expensive labour, affordable real estate, less resistance to change, and assistance from the Government of India’s Smart Cities Program. Currently, a number of the Tier 2/3 cities are situated in business-friendly states that already have, or will have, the proper infrastructure required for large-scale economic activity. 

Note: Government of India’s Smart Cities Program is geared toward developing new city infrastructure and implementing smart technologies to improve the performance and quality of current urban services.

In this series we will go over three emerging cities that have been thriving in recent years and may correlate with your future business expansion.

This Month’s Emerging City

According to ’EY’s India Attractiveness Survey 2015, Vadodara was considered the third most rapidly emerging city Vadodara, located in Gujarat the westernmost state of India, is home to almost 2 million (as of 2019). It is branded the cultural capital of Gujarat, known for its rich culture and historical background.

The majority of the population in Vadodara speak Gujrati, but due to its diversified culture, its people typically have an understanding of both Hindi and English. The city, ranked the second safest in India, has affordable living and good transport connectivity with all the major cities. Including an express highway connecting to Ahmedabad and another that links to Mumbai.

The 4 Core Sectors of Vadodara


The first of this industry that came to Vadodara around 1907 was Alembic Pharmaceuticals. In 1962, there were already 288 factories that were in chemicals, cotton, textile, and pharmaceutical industries.

Vadodara is one of the four clusters in Gujarat which manufacture pharmaceuticals, specifically biogenetics and formulations. A few of the major companies established in Vadodara are Elysium Pharmaceuticals Ltd., Relax Biotech Pvt. Ltd., Baroda Pharmaceuticals industries, Futurelife Pharmaceuticals Pvt Ltd. Gujarat remains one of the leading manufacturers of pharmaceuticals with export destinations like the UK, Russia, Australia, Africa, and the United States.

Chemicals and Petrochemicals 

In 1940, companies like Jyoti and Sarabhai Chemicals established themselves in Vadodara. However, the major industrialization shift happened in 1965 with the start of first phase production by the Gujarat Refinery. This opened the gate for various other chemical and petrochemical activities.

Today, corporations like Indian Oil Corporation Ltd., Gujarat State Fertilizers & Chemicals (GSFC), Gujarat Alkalies & Chemicals, Gujarat Companies Power Company Ltd., and Heavy Water Plant all are operating in the same radius of the Gujarat Refinery. 

Emerging IT hub

In Gujarat, Ahmedabad is the typical choice for most of the corporations to set up their IT offices. However, Vadodara, with its talent and resources, has started attracting foreign investors too. Currently, the city has companies like Wipro, Helios Solutions, AllScripts India LLC, Yukon Technologies, and Infosys.

It will not take long for Vadodara to become a hub for foreign IT corporations.


Vadodara is set to become an educational hub of the Gujarat state, with historical pride in having Maharaja Sayajirao University (MSU). Maharaja Sayajirao, who ruled the city in 1875, built the academic infrastructure of Vadodara which inspires the great educational pride.

Vadodara also houses India’s first Railway University, The National Rail and Transportation Institute (NRTI) that offers programs such as Transportation Technology, Transportation Management, and Transport Policy & Economics. The city also has the Indian Institute of Information Technology (IIIT) which is one of the most renowned IT institutions of India, currently operating from its temporary campus in Gandhinagar.

Key Takeaway 

For a company that is looking at global expansion, whether in India or elsewhere, it’s prudent to conduct thorough research beforehand. This may allow you to discover other market entry avenues outside of the obvious, such as Vadodara.

Most of the Tier 1 cities in India already have strong global businesses which could be your direct competitors. Selecting a less competitive market, with great resources, increases the chances of exponential growth. Not to mention how much time, money, and potential headaches can be saved from addressing problems associated with traffic and leasing in the more metropolitan cities. 

Fellow leaders, what is keeping your business back from international expansion? Let us know in the comments.

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