India’s next urban transition may not be taking place inside its cities. As the country has already begun Census 2027, and with rapid urbanisation, a discussion is going on whether the traditional definition of urban India still reflects the realities on the ground. The government is likely to change the definition.The discussion centres on a growing category of settlements that are neither fully rural nor formally urban, but increasingly display characteristics of both.A senior Union Urban Ministry official said, “These are the times when there are chances that the government would want to change the definition of what is urban because the time has changed and demography has changed.”The question has acquired greater significance at a time when economic activity, mobility and infrastructure needs are expanding beyond municipal boundaries.Settlements on the outskirts of major cities, along industrial corridors and around emerging economic hubs are witnessing changes once associated only with urban centres. Residents work in manufacturing, services and logistics, travel daily to nearby cities and depend on transport, housing, sanitation and digital connectivity that mirror urban requirements. Yet many continue to be governed as rural areas.India’s census classifies urban areas as either statutory towns, which are governed by urban local bodies, or census towns that meet specified thresholds relating to population, density and non-agricultural employment. While these categories have long guided urban planning, a growing view among planners is that they may not fully capture the pace and nature of contemporary urbanisation.The issue goes beyond classification. Whether a settlement is categorised as rural or urban influences planning priorities, infrastructure investments, fiscal allocations and institutional responsibilities. In a way, it affects all major indicators. Urban local bodies generally have greater planning powers and resources than rural institutions, making classification a critical factor in how rapidly growing settlements are governed.The challenge has become more visible as development spreads across wider regions rather than remaining confined within city limits. Employment patterns have diversified, mobility has improved and economic linkages increasingly connect villages, towns and cities into larger networks. In many places, settlements that were once predominantly rural have become deeply integrated with urban economies, even as their administrative status remains unchanged.The trends are visible across the developing world, where urban growth is increasingly occurring outside traditional city centres. Metropolitan regions, growth corridors and peri-urban belts are emerging as major centres of economic activity, prompting planners internationally to explore methods of measuring urbanisation that look beyond administrative boundaries.For policymakers, the task is no longer limited to managing the growth of cities. Increasingly, it involves understanding a changing geography in which the features of urban life extend far beyond city limits. As India’s economy expands and patterns of settlement evolve, the debate over what constitutes an urban area may become as important as urbanisation itself.