According to the WeAreCity Report by UnboxingBLR, Bengaluru has emerged as the most affordable IT talent hub globally in 2022, offering an average annual salary of $12,000 for software engineers. This is a tenth of Silicon Valley’s average of $125,000, and only one-fourth of the global average of $46,000. The revelation comes at a time when international tech firms are increasingly outsourcing to India, lured by the promise of high skill and low costs. Global Salary Disparities in Tech The salary gap is stark. Software engineers in Toronto ($75,000), London ($65,000), Berlin ($56,000), and Tokyo ($62,000) earn four to six times more than their Bengaluru counterparts. Even Beijing ($46,000), often considered an Asian tech powerhouse, pays nearly four times more. Only Bengaluru stands out with a five-figure salary in a sea of six-figure averages, reported a TOI infographic. “Bengaluru is the only global tech city where the average salary of software engineers remains in the lower double digits,” the TOI report notes, underlining a trend that continues to position India as a cost-effective talent powerhouse. Why Are Bengaluru Salaries So Low? Several factors contribute to Bengaluru's low compensation rates. India’s vast population of engineering graduates, a long-established outsourcing ecosystem, and relatively low cost of living mean companies can attract skilled labour at much lower wages. “Even compared to the global average, it’s only about one-fourth,” the report emphasises. Moreover, Indian developers often work on outsourced coding, testing, and support roles, while core product development and architecture remain in high-wage regions. India's domestic tech boom, however, is now reshaping the talent market. Startups are increasingly demanding full-stack and AI talent, leading to competition between global MNCs and homegrown unicorns. Yet, despite rising demand, supply continues to outpace, keeping wages in check. Investment Magnet for Offshore Technology Operations Bengaluru’s affordability has been instrumental in attracting global tech giants like Google, Microsoft, and Amazon, all of whom have expanded their R&D and support operations in the city. “Bengaluru’s software engineers may be earning less, but their productivity, language skills, and adaptability make them highly attractive to global firms,” said Sanket Jain, a Bengaluru-based tech consultant. “The dollar goes a long way here.” A 2024 Nasscom-McKinsey study found that more than 1,500 global capability centres (GCCs) now operate in India, most of them concentrated in Bengaluru, Hyderabad, and Pune. The GCC market is projected to grow from $35 billion in 2023 to $60 billion by 2030, cementing India’s role as a back-end digital engine of the world. The Flip Side: Brain Drain and Pay Pressure While India benefits from cost arbitrage, low salaries have also contributed to a growing brain drain, particularly among experienced engineers. Many migrate to Canada, Europe, or the US in search of better compensation. Others shift to freelance and remote-first platforms like Toptal or Upwork, where global clients offer premium rates. The disparity also raises long-term concerns about sustainability of skill quality if compensation doesn’t rise in line with global inflation and tech innovation cycles. As India’s software engineers continue to power much of the world’s back-end technology infrastructure, Bengaluru’s distinction as the cheapest global IT talent pool will remain both a competitive advantage and a policy challenge. Companies benefit from operational savings, but the long-term sustainability of underpaid engineering talent remains under scrutiny.