Home ／ Insights on entering the Indian market
2026.03.24
Bengaluru (Bengaluru) is India's 3rd largest city, known as "India's Silicon Valley," and a global center for technology and startups. As of 2025, it was selected as one of the world's top 12 tech cities in CBRE's "Global Tech Talent Guidebook 2025" and is counted among the largest markets in the world for AI development talent.
Over 16,000 startups are based here, and in 2024, Bengaluru companies captured 47% of India's total startup funding (over $12 billion). The total ecosystem value has reached $136 billion, making it one of the most important markets for Japanese companies considering entry into India.
Bengaluru's tech talent pool exceeds 1 million, and its concentration of AI-related talent is the largest in India. Major domestic and international IT companies such as Google, Amazon, Microsoft, SAP, Infosys, Wipro, and TCS are concentrated here, making it a top-tier city globally as a location for global R&D centers.
For Japanese companies, it can be said to be the ideal city for technology-related business needs such as hiring IT talent, finding digital transformation (DX) partners, and searching for technology partnership candidates.
Over the five years from 2020 to 2024, it produced 32 unicorn companies (valued at over $1 billion). More than 1,500 VCs, over 2,200 CVCs, and 17,000 angel investors form one of Asia's largest funding networks. Seed funding in 2024 totaled $268 million (up 26% year-on-year).
The Karnataka state government has also allocated $36 million to a Fund of Funds and $12 million to deep-tech support in its 2025 state budget, driving the strengthening of the ecosystem.
Bengaluru is a multilingual, multicultural city, drawing talent not only from across India but from around the world. As a result, receptiveness to international food culture and lifestyles is extremely high, and markets such as Japanese restaurants, craft beer, and specialty coffee are also thriving.
With a young average age (around 30) and high disposable income, it is also ideal as a test market for new products and services.
With the concentration of IT and BPM companies, Bengaluru's office market is booming. In major business areas such as Whitefield, Electronic City, Marathahalli, and Sarjapur Road, demand for Grade A office space remains consistently high.
Many Japanese companies have entered Bengaluru, including Toyota (also expanding its base into Maharashtra), Sony, Panasonic, and Hitachi. Japan-India collaboration is particularly active in the IT and manufacturing sectors, and cases of collaboration with startups are also on the rise.
For the specific methods of setting up an IT base in Bengaluru (establishment forms such as GCCs, comparison with other Indian IT cities, and the practical steps of setting up a base), see the separate article "India's Silicon Valley, Bengaluru: Reasons for IT Entry and a Comparison with GCCs and Other Cities." covers that in detail. As a first step, this article organizes what kind of market Bengaluru is through five key characteristics.
When setting up an IT base in Bengaluru, the center of gravity is the cluster of tech parks spread across the city. The largest IT corridor is Outer Ring Road (ORR), where large complexes such as Embassy Tech Village and RMZ Ecospace host companies including Microsoft, IBM, Cisco, and Oracle. Manyata Tech Park in the north is one of Bengaluru's largest IT parks at roughly 300 acres, and Whitefield is home to ITPL (International Tech Park), one of India's oldest tech parks. Electronic City, Koramangala, HSR Layout, and Sarjapur Road are also hubs for startups and IT companies.
The office market is buoyant, with Grade A office occupancy staying at high levels. Rents in key districts such as ORR and Whitefield are trending upward, and competition intensifies for the best locations. When choosing a site, it is realistic to narrow down the district based on the talent pool you want to hire, accessibility, and budget.
バンガロールは、グローバル企業の開発拠点（GCC）が最も集まる都市です。その数は市内で870拠点を超え、インド全体のGCC人材の3分の1超がここで働いています。日系企業の進出も再加速しており、楽天は2014年に数人で設立した拠点をインド全体で5,500人超の規模に広げ、ラクスルやメルカリも開発拠点を構えています。半導体分野では、ルネサスエレクトロニクスがインド最大級のR&D拠点を置き、東京エレクトロンも2025年にソフトウェア開発拠点の新設を発表しました。半導体関連のGCCはセンター数の4割超、従事者数の6割がバンガロールに集まるとされ、開発・テック領域では他都市を大きく引き離しています。
From a market-entry standpoint, this concentration itself is the appeal. If you are aiming to secure development functions or highly skilled IT talent, Bengaluru, with its huge talent pool and well-established ecosystem, is a strong option. For the different ways to set up an IT base (how to build a GCC), a detailed comparison with other cities, and the practical steps for market entry, see our separate article "India's Silicon Valley, Bengaluru: Reasons for IT Entry and a Comparison with GCCs and Other Cities." which covers these in detail.
A growth market also brings challenges. The biggest headache is traffic congestion: various traffic indices rank Bengaluru among the world's slowest cities to get around, and it is not unusual for a 10km trip to take more than 30 minutes. When choosing a site or where employees will live, commuting routes need to be given serious weight.
On the talent side, high demand is pushing annual salary increases to around 9-11%, and even higher for specialist roles. Attrition in the IT services industry is also high, with product companies and GCCs poaching talent by offering higher pay. Investing not only in hiring good people but also in retaining them, through compensation, career paths, and the work environment, is the key to succeeding in the Bengaluru market.
Bengaluru sits on a plateau at an altitude of about 900 meters, and its average annual temperature of around 25°C makes for a comfortable climate year-round. The heat is much less of a burden here than in India's other major cities, which is often cited as a plus for expatriate life. There is an active Japanese community, the Bengaluru Japanese Association, and several Japanese restaurants. On the education side, there is no full-time Japanese school; children mainly study subjects such as Japanese language at a supplementary school. Security is considered relatively calm compared with other major Indian cities, but families relocating with children are advised to check the education environment in advance for peace of mind.
Bengaluru is also the center of India's startup scene. About a quarter of the startups founded in India between 2014 and 2019 are said to have originated in Bengaluru, and the Global Startup Ecosystem Report 2025, which compares major startup cities worldwide, ranked it 14th globally. Between 2020 and 2024, Bengaluru and Karnataka produced more than 30 unicorns, and cumulative venture investment has reached tens of billions of dollars. The steady stream of new services and technologies emerging here is also appealing to Japanese companies looking for partners or suppliers.
The depth of the consumer market is also worth noting. Per capita income in urban Bengaluru is the highest in the state, said to be more than double the state average, and the urban area alone generates more than a third of Karnataka's GSDP. The city has a large population of young, high-earning professionals working in IT and startups, and they are known for their receptiveness to new products and services, imported goods, and premium items. For companies entering with consumer goods or services, it is a market well suited both as a test market and for a full-scale rollout.
バンガロール市場の根幹を支えるのが、層の厚いIT人材です。市内にはIT産業の従事者だけで47万人を超える人材が集まり、工科系の大学や研究機関、長年にわたるIT産業の蓄積が人材供給を支えています。グローバル企業の開発拠点が集中することで、最先端の技術に触れた経験者が育ち、再びエコシステムへ還流する好循環が生まれています。
At the same time, competition for talent is fierce, and pay keeps rising for in-demand roles. The advantage of access to high-quality talent comes hand in hand with the challenge of rising hiring and retention costs. Understanding these market characteristics and clearly defining the functions and profile of talent your company needs before entering is what determines success or failure in Bengaluru.
Bengaluru is India's largest technology city, with more than a million tech professionals, over 16,000 startups, and a total ecosystem value of $136 billion. It is also among the world's leading hubs for AI development talent, recognized as one of the world's top 12 tech hubs, and its growth kept accelerating through 2025. For Japanese companies, it is a market that offers diverse entry opportunities, from technology partnerships and testing new markets to the food business.
It is the capital of Karnataka state in southern India and is known as the IT and technology hub called the "Silicon Valley of India." It combines a dense concentration of startups with a cosmopolitan consumer market, and is characterized by a large population of young, high-spending consumers.
They include being a world-class IT hub, having one of India's largest startup ecosystems, being a cosmopolitan consumer market that draws diverse talent, and having a growing office and real estate market.
There is a large population of young, high-income professionals working in IT and startups, forming a segment that is highly receptive to new products and services. It is a market with strong acceptance of imported goods, premium products, and subscription-based services.
There are several approaches, including setting up a GCC (Global Capability Center). For the different setup formats, a comparison with other cities, and the practical steps for market entry, see our separate article "Bengaluru IT Market Entry Guide" which covers these in detail.
They include intense competition for talent that is pushing up labor costs and office rents, as well as urban infrastructure challenges such as traffic congestion. Retaining top talent and managing costs are the keys to succeeding in this market.
Start by defining your target customer segment and the function you will handle, such as IT development, sales, or selling consumer goods. Designing your base and team around the market's characteristics, and investing in securing and retaining talent, will make it easier to move forward.
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