While competition from Chinese and Filipino cities is strong, there is a healthy competition among internal Indian cities to entice suppliers and clients alike.

"This increasing trend is sure to accelerate the emergence of multiple delivery centres within India and rapid development overall," the report observed in an upbeat assessment of the offshoring trend while recording a sudden spurt in activity among Tier II cities in India and a narrowing gap between urban and semi-urban centres.

The report also classified Mumbai, Bangalore, and Delhi as Generation I cities that possessed manpower and other catalytic conditions in the 1990s to attract IT business.

Hyderabad and Chennai are classed as Generation II cities that began their growth phase in the mid-90s and significantly improved their competitiveness.

Mysore, Coimbatore, Vizag, Noida, Kolkota, Chandigarh are seen as Gen III cities which have the potential to get there.

Laggard cities are those with a low OCC Index and low performance rating. They include Jaipur, Bhubhaneshwar, Shimla, Nagpur, Guwahati, Goa and Ahmedabad.

"These cities need to critically evaluate their competitive factor and adopt concrete actionable plans... before they are permanently left behind," the report warned.