One of the biggest mistakes companies make is treating India as a single, uniform market. In reality, states differ widely in infrastructure, labour availability, incentives, costs and culture. Choosing the right state—and then the right city—can significantly improve your chances of success.

Step 1: Start from your business model

Before looking at maps, clarify:

  • Are you setting up manufacturing, a warehouse or a sales/ service office?
  • Where are your key customers and suppliers likely to be?
  • How sensitive is your business to logistics costs vs. labour or power costs?

A high-value, low-volume product has very different location needs than a fast-moving, price-sensitive one.

Step 2: Build a short-list of states

Use a few anchor criteria to narrow India’s 28 states to 3–5 options:

  • Proximity to customers and ports
  • Availability of relevant skills (engineering, logistics, back-office etc.)
  • Overall industrial ecosystem for your sector
  • State-level incentives and ease-of-doing-business scores

This creates a manageable list for deeper analysis.

Step 3: Compare states with a simple scorecard

For each shortlisted state, score factors like:

  • Land and rental costs
  • Power and utility reliability
  • Road, port and airport connectivity
  • Local regulations and approvals
  • Quality of life for expatriate and local staff

A transparent scoring system helps align internal stakeholders quickly.

Step 4: Validate on the ground

Desk research is not enough. Plan visits to potential sites, industrial parks and nearby cities. Talk to:

  • Existing companies in your sector
  • Local consultants and developers
  • Logistics providers and recruitment agencies

On-ground feedback often reveals practical realities that brochures don’t mention.

Step 5: Think five years ahead

Finally, ask: can this location support our expansion plans? Consider potential land expansion, new industrial corridors and planned infrastructure. A slightly more expensive location today may be cheaper over the long term if it supports growth.

By treating location choice as a structured exercise rather than a quick decision, you reduce risk and give your India operations a strong foundation from day one.