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We have recently changed our Hindi website hosted under a subdomain to a subdirectory of a main website that's in English.

What happens if we set the geo-targeting of the website that's under this subdirectory to India but the root domain is not set for any specific country?

Will this affect our whole traffic? What will be the impact in search engine ranking? Will this impact the main (English) website's ranking or traffic?

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    Were you previously hosting your Hindi website under a subdomain on the same English website as it is now? What is the relationship between the English website and the Hindi website in terms of content? What is the ranking and traffic of these sites prior to the move? We really need some more details in order to be able to answer this... – dan Feb 14 '18 at 5:26
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In my opinion there is no need to set any geo-targeting. Google is good in terms of recognizing, who is interesting in your content. Google looks on SERPs: who is searching for terms your site is ranking, how clicks on your page in SERPs.

In case your site is selling anything... no, in this case i would again not recommend to establish any kind of geo-targeting:) What you could do, and this will be in my opinion absolutely enough - do implement some structured data, which will describe your firm, your products, services and offers. And don't forget to use the property http://schema.org/areaServed - with this property you can exactly describe for which region you serve your products or services.

The more structured data you implement, like areaServedor your GoogleMyBusinessaccount or your address and link to Google Maps, marked up with structured data - the more chances there are, that Google exactly recognizes your range of customers without any geo targeting.

I would always avoid usage of geo-targeting - Instead of this I would always prefer to let the visitor, the human, decide, whether your products or services are suitable to the needs. If a visitor visited your site, specially like organic visitor, than Google had enough causes to lead the visitor to it

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If you have geo-targeting for your subdomain and change it to a directory on your site you will indeed lose the geo-targeting for that subdomain.

Note, moderator Stephen Ostermiller has recently shown me that you can target individual pages by country code using

<link rel="alternate" href="http://example.com/en-ie" hreflang="en-ie" />
<link rel="alternate" href="http://example.com/en-ca" hreflang="en-ca" />
<link rel="alternate" href="http://example.com/en-au" hreflang="en-au" />

In your case, to target India with an English page you may want

 <link rel="alternate" href="http://example.com/en-in" hreflang="en-in" />

https://support.google.com/webmasters/answer/189077?hl=en

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