These 7 Tier II cities mint most millionaires

Introduction

For many years in India, major metropolitan “Tier I” cities like Mumbai, Delhi, Bengaluru — with their financial, governmental, and technological clout — dominated wealth creation. However, recent evidence, particularly from the Mercedes-Benz Hurun India Wealth Report-2025, shows a strong trend: several Tier II cities are now emerging as “millionaire makers.” This shift reflects broader economic decentralisation, improved infrastructure, more diversified industries, and evolving investment patterns. Understanding which cities are leading this trend, how they are doing it, and what challenges remain is important for policy makers, investors, businesses, and citizens.

Which Tier II Cities Are Minting Millionaires

The 2025 Hurun report identifies seven Tier II cities among India’s top 10 cities for number of millionaire households. These are:

1. Ahmedabad
2. Surat
3. Jaipur
4. Vadodara
5. Nagpur
6. Visakhapatnam
7. Lucknow

These cities are no longer peripheral — they are making substantial contributions to the nation’s wealth profile. While they do not yet compete in sheer numbers with metros like Mumbai, Delhi, or Bengaluru, their growth in millionaire households is noticeable and accelerating.

Key Drivers Behind the Rise

Several factors contribute to this rise of millionaire households in Tier II cities:

1. Economic Diversification and Industrial Growth
   Cities like Ahmedabad and Surat have strong manufacturing and textile sectors; Jaipur has handicrafts, tourism, and manufacturing; Visakhapatnam has port-driven logistics and industrial pipelines. This helps build wealth locally rather than relying only on services in Tier I.
2. Improved Infrastructure & Connectivity
   Better roads, airports, internet, and urban infrastructure reduce costs of doing business, and make these cities more attractive for investment. As transport and communication improve, they become more connected to national and global markets.
3. Lower Costs & High Quality Talent
   Costs of real estate, labour, living are lower compared to big metros. This allows entrepreneurs and businesses to scale more cheaply. Meanwhile, educational improvements (universities, technical institutes) are generating talent in smaller cities, reducing migration costs.
4. FinTech, Financial Inclusion, and Access to Capital
   With digital banking, microfinance, better stock/bond markets, and increasing penetration of investment instruments, even non-metro households have better access to wealth-building tools. Wealth management and financial services are also reaching out to Tier II cities.
5. Cultural & Social Factors
   Rising aspirations, local entrepreneurship, family businesses scaling up, and newer generations seeking to expand beyond traditional agriculture or small trade. Also, increased consumption and local market demand help profitable business models.

How Large Is the Shift — Scale and Trends

• The report shows that more than 79% of millionaire households are still located in the top 10 Indian states, indicating that wealth is still somewhat concentrated. But the presence of 7 Tier II cities among the top 10 city list indicates a meaningful shift.
• The number of millionaire households in India has surged — by about 90% from 2021 to 2025.
• States like Maharashtra lead by a large margin, but states housing many Tier II cities are also showing accelerated growth.

Challenges Faced by Tier II Cities

While the rise is promising, these cities face several obstacles before they can fully match Tier I cities:

1. Infrastructure Bottlenecks
   Even though improvements are happening, many Tier II cities still struggle with inconsistent power supply, underdeveloped public transport, inadequate urban planning, and delays in civic amenities.
2. Talent Retention & Skill Gaps
   While education is improving, retaining highly skilled professionals is harder in Tier II cities. Many still move to metros for better opportunities, international exposure, networking, etc.
3. Access to Sophisticated Financial Instruments & Networks
   Venture capital, private equity, global markets, legal / regulatory sophistication may lag in Tier II cities. Wealth-building at high levels often requires networks and access that metros are better at providing.
4. Regulatory, Policy, and Governance Issues
   Local governance can be less efficient; land acquisition, permits, regulatory approvals are often more difficult or slower. Corruption, bureaucratic inefficiency remain concerns in many non-metro areas.
5. Quality of Life & Amenities
   To retain wealthy households (or attract them), factors like healthcare, international schools, cultural amenities, environmental quality matter. Some Tier II cities lag here, which can limit inflow of wealth-builders.

Implications & Potential

The rise of millionaires in Tier II cities has several important implications:

• Balanced Economic Growth: If wealth generation is more evenly spread, then the burden on megacities (traffic, housing, pollution) might reduce, and regional inequalities might narrow.
• Investment Opportunities: Businesses — especially in financial services, real estate, retail, health, education — can find untapped markets in Tier II cities. Wealth management firms, luxury brands, infrastructure companies can expand there.
• Urban Policy & Planning: Governments need to anticipate this growth — ensuring that infrastructure, services, legal frameworks keep up; perhaps incentivizing investment, improving ease of doing business at local levels.
• Social & Environmental Risks: Rapid growth can also cause risks — environmental degradation, unplanned expansion, inequality. Ensuring inclusive growth is key.
• Changing Consumer Patterns: As more affluent households emerge in smaller cities, consumption patterns shift — with demand for premium goods, real estate, travel, leisure — which shapes markets.

Conclusion

The 2025 data marks a turning point: wealth creation in India is no longer the exclusive domain of Tier I metro cities. Ahmedabad, Surat, Jaipur, Vadodara, Nagpur, Visakhapatnam, and Lucknow are acting as rising hubs for millionaire households. While challenges remain, the combination of economic diversification, better infrastructure, access to capital, and changing social dynamics is fueling a decentralisation of affluence.

Going forward, the degree to which these cities can sustain growth depends heavily on improving governance, infrastructure, human capital, and connectivity — both physical and financial. If those pieces align, India may see its wealth map redrawn more evenly — not just a few big cities, but a network of cities across the country generating prosperity.