It is common to note that Retailers and brands across beauty, fashion, footwear, luggage and even salon chains are flocking to Tier 2/3 towns. And the reason is simple.
Higher discretionary spends.
As the household incomes surge, savings in small towns take centre stage. However, families are spending on lifestyle products and services as well.
Reserve Bank of India (RBI) had released its Sixth Round of India’s Remittances Survey in March 2025. According to this report, Tamil Nadu accounts for 10.4% of India’s total inward remittances, amounting to approximately INR 1,01,845 Cr.
We decided to dig deep and see what a particular state could offer and here are the details about Tamil Nadu:
As a major metropolitan hub, the Chennai metropolitan region receives a significant portion of remittances from high-skilled professionals who are employed in IT, Healthcare, Engineering, etc. working in countries like the US, the UK, Europe and Singapore.
The Coastal, Southern & Central districts districts of TN including Ramanathapuram, Sivaganga, Pudukottai, Tanjore, aka “Gulf Belt” have a long-standing tradition of migration to the Middle East (UAE, Saudi Arabia, Kuwait).
The Western Belt, widely known for its Industrial prowess including cities like Coimbatore receive substantial funds from business-related migration and skilled diaspora in Western countries.
Editor’s Note
Tamil Nadu is unique because it has the most diverse mix of remittance sources in India due to high value transfers that come from advanced economies driven by tech professionals.
South East Asian countries offer consistent flow of remittances from migrant workers, who toil 14 hrs a day and work for a decade until they build handsome savings.
Lastly, remittances from GCC countries include those from traditional blue-collar workers from the services sector, who not only take pride in being an NRI but work until their kids get settled down with higher education, jobs and weddings.
According to a recent report released by Mastercard India in association with ClarityX, & MapMyIndia, the 3Fs (Fuel, Food and Fashion) are driving Tier 3 / 4/ 5 towns to grow twice as fast as their metro peers.
Smaller towns contributed 37% of total spends in 2025, according to the report when compared to 27% in 2023.
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