List of Tier 1, Tier 2, Tier 3 & Tier 4 Cities in India in 2026 – India’s City List

Indian cities have been categorised into tiers based on a mix of population size, infrastructure quality, economic development and level of urbanization as well as job market opportunity availability, levels of health services and educational attainment, level of transportation accessibility etc.

This tier system helps policymakers plan urban development, allocate resources, and provides useful insights for businesses and real estate investors.

Generally, Tier 1 cities are the most developed and populous urban centres, while Tier 4 cities are smaller urban locales with basic infrastructure and lower economic activity. 

In this article, we will explore Tier 1 Cities in India, Tier 2, Tier 3 and Tier 4 and their real estate trends and more. So, let us start this blog.

How Cities Are Classified in India?

Cities in India are classified into tiers based on a mixture of population size, infrastructure quality, economic development, and urbanization levels. One commonly referenced approach, for example; Reserve Bank of India and other Indian Government departments have established various methods for doing so.

A common, but not exclusive, method of categorizing urban areas in India by Tier System is based on an approximate number of people that reside in each Tier, even if the Tier System is not the only means to determine Tiers, in general Tiers are defined as follows. 

Population Based Classification

• Tier 1 Cities includes the largest urban centres with upwards of millions of residents.
• Tier 2 Cities includes medium-sized urban centres with growing populations, basics in infrastructure to sustain their population, and predicted future growth in population and infrastructure.
• Tier 3 Cities includes smaller-sized urban centres and emerging urban centres
• Tier 4 Cities includes small urban centres and communities with basic urban needs. 

What is Tier 1 Cities in India?

Tier 1 cities in India serve as major metropolitan centers providing economic activity through advanced infrastructure, access to employment opportunities, and increased cultural and educational, and commercial activity.

Typical features are high concentrations of people with a strong ability to connect using airports as well as metro networks; strong access to healthcare and education resources.

List of Tier 1 Cities in India

Here is the list of tier 1 cities in India:

The tier 1 cities of India are the most important cities. They are the backbone of this country and are known for their strong economic activity, advanced infrastructure, and high standard of living.

Delhi, Mumbai and Bangalore are among the top tier 1 cities in India. These cities offer top-notch education, better infrastructure, the Presence of Fortune 500 companies, and better healthcare facilities, among other things.

Also, tier 1 cities have better connectivity, international airports, metro rail networks, and well-established social infrastructure. The common tier 1 cities in India are Delhi, Mumbai, Bengaluru, Chennai, Hyderabad, and Pune.

These cities have high per capita income, large populations, and ample job opportunities.

Key Characteristics of Tier 1 Cities

A number of factors have contributed to the ranking of these cities as Tier 1 Cities of India:

• Population above 50 lakhs
• Strong economic output and ecosystem of businesses
• Better Social infrastructure
• Presence of Multinational Companies & Job Opportunities
• Top-notch Healthcare facilities and reputed educational institutes
• Quality of life is comparatively high; however, cost of living is likewise elevated.
• Dynamic real estate markets with significant demand and interest from investors

Real Estate Trends in Tier 1 Cities of India

• Tier Cities have higher property rates compared to Tier 2 and Tier 3 Cities. The major reasons are limited land availability, dense population, and strong buyer demand.
• The demand for premium and luxury housing is very popular in the tier 1 cities of India. Especially in a prime location, the prices are skyrocketing.
• As per the industry reports, the India luxury housing has seen a remarkable growth in 2025 from 40% to 85%.
• NRIs are mainly preferred for Tier 1 cities for real estate investments
• Tier 1 cities offer higher capital appreciation and rental yields.

What is Tier 2 Cities in India?

Tier 2 cities experience rapid urban growth due mainly to improvements in local economies, infrastructure, and commercial and residential real estate markets. Compared with Tier 1 metros, Tier 2 cities typically provide an advantageous combination of opportunity and cost-effective living.

List of Tier 2 Cities in India 2026

The Tier 2 Cities in India are an alternative to metropolitan cities. These cities offer a lower cost of living compared to Tier 1 cities. Jaipur, Lucknow, Surat, Patna, and Nagpur are among the most common tier 2 cities in India.

These cities are rapidly growing in different sectors like IT services, manufacturing, education, healthcare, and tourism. Our Government is also working to reduce the burden on Tier 1 cities by focusing on Tier 2 cities.

Tier 2 cities of India, like Jaipur, Lucknow, Indore, Surat, and Kochi, have improved road networks, new airports, metro rail projects, and industrial corridors, which will make these cities more connected and business-friendly.

Key Characteristics of Tier 2 Cities

• Population between 10–50 lakhs
• Improving infrastructure
• Rising job opportunities
• Affordable cost of living
• High real estate appreciation potential

Real Estate Trends in Tier 2 Cities of India

• Trends indicate an increase in the rising demand for residential housing from professionals and families moving out of the metro area to find more affordable housing.
• Cities like Thiruvananthapuram experienced substantial increases in housing sales during 2025 while experiencing higher-than-average growth compared to other Tier 2 Cities of India. 
• The ongoing infrastructure improvements (such as metro lines extending to the airport, roads, and commercial and industrial business parks) will help support future price appreciation of property values across the entire city.
• Developers are launching their projects that will appeal to mid- and lower-income households as well as first-time homebuyers.
• Furthermore, the broader real estate community believes that Tier 2 Cities currently represent a significant investment opportunity given the low entry price point, coupled with great potential for future growth.

What is Tier 3 Cities in India?

Cities that are Tier 3 contain smaller urban areas that are currently being developed. Since these cities have not yet completed development of the same size of physical infrastructure supporting either Tier 1-City or Tier 2-City, many Tier 3 Cities have seen Continued Gradual Increase in Connectivity, Job Creation, and Demand for Housing.

List of Tier 3 Cities in India 2026

Here is the list of top Tier 3 Cities in India:

The Tier 3 cities in India are smaller and developing urban centres. These cities have lower populations but are improving their infrastructure. The economics of Tier 3 cities are mainly based on local industries, agriculture, small businesses, education, and regional trade.

They play an important role in reducing the pressure on metropolitan and Tier 2 cities. Meerut, Udaipur, Roorkee, Jhansi, Bikaner, etc., are examples of top-tier 3 cities in India.

These cities have shown steady improvements in road connectivity, public transport, healthcare, and educational facilities. Government initiatives, industrial corridors, and highway projects are helping develop these Tier 3 cities.

Key Characteristics of Tier 3 Cities

• Population between 1–10 lakhs
• Growing infrastructure
• Lower cost of living
• Strong local economies
• Increasing digital adoption

Real Estate Trends in Tier 3 Cities of India

• The Real Estate Market in Tier 3 is still relatively new with properties typically costing less than those found in higher-ranked cities.
• The demand for residential properties within Tier 3 Cities depends primarily on local needs instead of large companies moving into Tier 3 as investment sources; however, these two sectors should be thoroughly studied since their future may come from within.

What is Tier 4 Cities in India?

Tier city 4 consists of small towns and emerging urban clusters with limited or basic physical infrastructure and considerably lower levels of economic activity than that seen in Tier 1 or Tier 2 Cities. The cities in their current form act as a transition area between Rural and Urban Economies.

List of Tier 4 Cities in India 2026

The Tier 4 cities in India are mainly small towns and are at an early stage of development. These small cities have low population density and basic Infrastructure. The economy is mainly dependent on agriculture, local trade, small-scale industries, and government services.

Banswara, Kasganj, Datia, Kapurthala, and Sujangarh are some examples of Tier 4 cities in India. These cities have limited Infrastructure and are improving through government schemes focused on rural–urban integration, road connectivity, sanitation, housing, and digital access.

While currently real estate activity may not occur on a large scale in these areas, Tier 4 Cities continue to present opportunities for additional infrastructure and economic growth in the future. 

Key Characteristics of Tier 3 Cities

• Population below 1 lakh
• Limited infrastructure
• Low cost of land and labor
• Agriculture and local trade-driven economy

Real Estate Trends in Tier 4 Cities

• There is little quantity or variety of real estate activity occurring currently in any Tier 4 Cities of India, and most activity consists of (local) residential sales or small commercial operations.
• Tier 4 Cities average property prices are substantially lower than those found within higher-ranking cities.
• The long-term potential for growth exists from the provision of improved connectivity, developing nearby industrial based developments, and engaging in tourism.

Which are the Top cities in India?

We have explored the list of tier 1, tier 2, tier 3 and tier 4 cities in India. Now, let us see which is the top city in India based on GDP, population, and other factors.

Top Cities in India By Population

Here is the list of top cities in India by Population:

Top Cleanest City in India

Here is the list of top cleanest cities in India:

Top Cities in India by GDP

Top Most Livable Cities in India

Here is the list of most liveable cities in India:

Conclusion

The tier system defining India’s cities Tier 1 cities, Tier 2, Tier 3 and Tier 4 provides an effective means of analysing the diversity of urban ecosystems in India – from large cities to small towns.

Each classification presents clearly defined advantages and disadvantages that can be seen particularly in the areas of real estate, economic activity, and quality of life issues.

Cities classified as Tier 1 are high-value cities with vibrant real estate markets. Cities classified as Tier 2 are growing emerging market cities that continue to experience increasing demand. Cities classified as Tier 3 and Tier 4 represent developing markets that have many opportunities for growth and potentially lower costs of entry.

Understanding how to differentiate between these various classifications allows businesses and investors to better understand the best options available for living, investing, and future planning.

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