About 15 Tier II cities can challenge the leaders, which include the four metro cities, Hyderabad, the National Capital Region and Pune, the study conducted by the National Association of Software and Service Companies and management consulting firm A.T. Kearney said.

"The Indian IT- BPO sector has been a frontrunner of economic development in select cities. We now see the time as being right to spread this development to a new set of locations, provided the requirements of the industry can be met," Nasscom Chairman Ganesh Natarajan said in a statement.

The comprehensive study which covers and assesses 50 locations across India suitable for setting up software operations is expected to serve as an input for state goverment and other planning agencies for attracting investments.

"The development of only a few select set of cities has put severe pressure on the infrastructure, costs and also increased migration of resources," said Nasscom President, Som Mittal.

There was a lot of potential in the next set of locations if the right steps are taken now, he added.