India’s Smaller Cities Show Off Growing Wealth

New York Times: India’s Smaller Cities Show Off Growing Wealth

… Economists and government officials have long acclaimed India’s so-called second-tier cities as new founts of prosperity and incubators of India’s growing middle class. Cities like Pune, a manufacturing and information technology hub a few hours outside of Mumbai, and Ahmadabad, the biggest city in India’s wealthiest state, Gujarat, have shown that smaller cities can attract big business.

But now even smaller cities in some of India’s most prosperous states are booming, too. Coimbatore, a city of about one million in Tamil Nadu near India’s southern tip, has expanded from textile manufacturing to software development and making auto parts.

Aurangabad, with 1.2 million people and a stable base of automotive assembly plants, factories and agribusiness, has long attracted the attention of companies selling small appliances, cellphones and economy cars. But as the city’s fortunes have grown, and cultural mores that once made ostentatious spending unseemly have shifted, companies selling luxury goods are also seeking out these newly flush consumers. A sprawling new mall just opened here, as well as new multiplex theaters and luxury hotels.

“The story of Aurangabad is the story of India,” said Debashish Mitra, head of sales and marketing for Mercedes-Benz in India. “There are many cities like Aurangabad, where Indians have money but were not indulging in luxury; they were always in a saving mode. But now that is changing. People want to spend, and feel they deserve luxury.” …