Small town India is no longer peripheral

The latent opportunity in Tier-3 and Tier-4 cities has for long been overshadowed by metropolitan India. The Power of Tier-III and Tier-IV Cities of India: Gateway to a $10 Trillion Economy shines a light on the often overlooked economic dynamism of India’s smaller towns and semi-urban centres.

The book convincingly argues that now these centres are shedding tags such as ‘peripheral’ or ‘modest’ or even ‘back of nowhere’ and emerging as powerful engines of growth. Driven by rising aspirations, expanding digital connectivity, better infrastructure, and a surge in entrepreneurial activity – these towns are now co-riders in this journey of the Indian economy.

Written by Sarabjit S. Puri, who has over two decades of experience in rural marketing, and Kunal Awasthy - an FMCG and retail expert with over two-and-a-half decades of global experience – the insights the book brings out are far deeper than that of an ordinary researcher as the narrative is based on first-hand experiences and not just on data.

Affordable smartphones, low-cost data and widespread 4G connectivity have dissolved the tyranny of distance. Small manufacturers, traders, artisans and service providers in Tier-3 and Tier-4 towns can now access national marketplaces through platforms such as e-commerce portals, social commerce and WhatsApp-led selling. A kirana owner or a handicraft producer is no longer limited to the local bazaar; demand can be discovered, created and serviced well beyond district boundaries. This has expanded addressable markets without a proportional rise in physical infrastructure costs.

In essence, digital infrastructure has not merely connected smaller towns to the Internet - it has connected them to opportunity. The economic impact lies in inclusion, optionality and aspiration, allowing these towns to participate in India’s growth story not as peripheral markets, but as active contributors shaping demand, talent and enterprise from the ground up.

This reviewer, while consulting for an FM Radio network that operates in Tier-3 and Tier-4 markets, discovered that exposure to digital platforms has redefined the aspiration and consumption of people in these places. The authors highlight this aspect by detailing how streaming, social media and vernacular digital content have influenced tastes in fashion, food, education and lifestyle products. This has led to higher demand for branded goods, better services and organised retail -- even in towns previously dominated by unbranded or loose products. Importantly, demand is now informed and comparison-led, forcing local businesses to upgrade quality and service standards.

The authors have smartly divided the book into four sections. The first one deals with enhancing the overall understanding of the Tier-3 and Tier-4 towns – the demography, the improving infrastructure and the cost advantage of operations here. The second part is about computing the strengths of these towns – and mind you the authors estimate that most of the 7,935 towns in the country are Tier-3 or Tier-4 towns! The third part of the book deals with the opportunities for segments such as BFSI, FMCG, Health and Pharma, Retail and Automobiles, besides the usual suspects – Agri and Allied industry. The last part deals with the digital consumption patterns of these towns.

While the book scatters data all through the text – a more impactful presentation would have been in the form of charts and tables. And even as it gives credit to various schemes of the Government of India, had these claims been backed up with data points, the reader would have bought into the story even more. The section on opportunities would have been far more impactful had the authors done the sizing of it. Claims such as “Hydrogen energy holds the power to transform rural India” or “As technology improves and costs fall further, solar energy will move from an alternative source to a primary one” needed backing up with some data even if was extrapolated based on certain postulates. And as would happen in building up a case as widespread as this – there is repetition of issues.

This is not to take away any credit for the extensive coverage of issues and the forcefulness of the argument made in favour of smaller cities and towns of the country. The book also provides a segmentation framework for field activation tactics. The sections on retail activation, micro-influencers and community events are full of examples that will ring true for anyone who has worked on the ground. The writing has a flow and is free of jargon, and the structure moves logically from diagnosis to opportunity.