The Ten Most Dynamic Cities

Ring of Change A factory suburb of Delhi, now surrounded by posh high rises. Newsweek

Construction: New development must keep up with demand in Indirapuram

In old Ghaziabad—20 kilometers outside New Delhi in the north Indian state of Uttar Pradesh—ancient green-and-white three-wheeled Tempos that double as buses career alongside a tangle of bicycle rickshaws, buffalo-drawn wagons and pushcarts. Tiny, no-name manufacturers advertise rubber gaskets, gears, machine tools. You'd never guess Ghaziabad is India's hottest city. But thanks to skyrocketing real-estate prices in the capital, Ghaziabad is emerging as the next popular address for Delhi-bound commuters. In residential pockets on the outskirts like Indirapuram, posh new developments are sold out. The largest developer, Shipra Estate Ltd., has built 7,000 two-, three- and four-bedroom flats, all of which are already occupied, says Vijay Sundar Raj, manager of sales and marketing. Many of the residents commute to IT jobs in neighboring Noida and Delhi.

Strategically located on the old Grand Trunk Road from Bangladesh to Afghanistan, Ghaziabad was targeted by the state for industrial development in the 1980s. Today the city is home to more than 14,000 small-scale industrial units and larger plants run by giants like Coca-Cola and the International Tobacco Co., which still provide most of the jobs in Ghaziabad proper. For all the new luxury high rises, Ghaziabad today is one of the most heavily industrialized cities in Uttar Pradesh.

The forecasts of rapid population growth, however, have more to do with New Delhi. Despite attempts to bar new industry within the capital, Delhi still creates more new jobs per year than the southern Indian IT centers of Bangalore and Hyderabad. "Delhi is a very big magnet," says S. K. Zaman, a top planner for Uttar Pradesh state, ruefully reflecting on the government's failure to contain the capital's population, which has grown by 50 percent every 10 years for the last half century, and now stands at around 14 million.

Authorities are having more success shifting at least some new growth to the outskirts. New roads, concessionary land prices and other schemes are drawing companies like Samsung, Honda and Siemens to satellite cities like Gurgaon and Noida. With its excellent highway connections to Noida and Delhi, Ghaziabad is starting to reap the benefits. Though it still doesn't have the cachet of Noida, it boasts cheaper land, and the completion this summer of the controversial Tehri Dam should help prevent frequent water and electricity shortages. None too soon. The city is already building a village to host the 2010 Commonwealth Games. And plans for both a new expressway and a second Delhi international airport on the east side of the capital should help put the entire region, Ghaziabad included, on the global map. —Jason Overdorf