From cost to resilience: 8 reasons why MNCs are rushing to set up GCCs in India

India is now the global hub of global capability centres (GCCs), with multinational companies across sectors eager to set up such centres in India. The rise of GCCs falls in step with the evolution of the Indian technology industry, which once was seen as a cost-saving destination for global tech giants and is now synonymous with innovation and entrepreneurship.

India’s GCC sector has become the nerve centres of global enterprises, helping them develop, test, and scale next-gen products and platforms, according to Karthik Padmanabhan, Managing Partner at management and consultancy firm, Zinnov.

In an interaction with EnterpriseStory, Padmanabhan lists out reasons why India will continue to maintain its dominance in the space of GCC:

1. Talent superpower

India produces over 2.5 million STEM (science, technology, engineering, and mathematics) graduates, which enables global companies to both scale and specialise. GCCs are tapping into this talent to drive core intellectual property growth through innovation.

“This ability to access a broad spectrum of highly skilled professionals is one of the key reasons global companies are increasingly relying on India for high-value tech work,” says Padmanabhan.

2. Cost to value engines

The shift has happened from GCCs being cost-saving outposts to a centre of gravity for innovation, whether it’s building autonomous driving software or coding AI-powered platforms. According to the Zinnov executive, over 86% of GCCs are now involved in AI and ML initiatives, up from just 65% in 2019.

3. Locally-built AI

GCCs in India are becoming central hubs for AI innovation, with many establishing dedicated GenAI Centers of Excellence (COEs) and developing LLMs for document intelligence, leading the way in AI governance globally. According to Padmanabhan, India’s growing AI literacy, combined with its expertise in industries like healthcare, finance, and automotive, makes it an ideal environment for the development of AI-powered solutions.

4. Scaling with startup speed

One of the most compelling advantages of India’s GCCs is their ability to scale at a speed comparable to that of startups, scaling from zero to 500 engineers in less than a year.

Padmanabhan says many of these GCCs are co-locating with startup hubs and engaging in joint ventures, with local founders helping develop new products. This is a win-win for both global enterprises and Indian startups alike.

5. Resilience is a boardroom agenda

During the COVID-19 pandemic, GCCs played a key role in ensuring business continuity, and this resilience enhanced their reputation. Companies now see them as indispensable for maintaining operational flexibility and stability in uncertain times.

6. Startup-GCC collaboration is the next big unlock

The collaboration between startups and GCCs has surged, which is proving to be beneficial to both parties. Padmanabhan notes that by working with GCCs, startups can accelerate product development, access cutting-edge technology, and co-create solutions that address global challenges at scale.

7. Regulatory tailwinds

The government’s focus on creating a favourable business environment, alongside its commitment to regulatory reform, has made India an even more attractive destination for companies looking to develop world-class products.

8. Rise of global roles from India

The executives at GCCs are taking on leadership positions across product, engineering, compliance, and digital transformation functions. These leaders are not only overseeing key product and tech functions but are also shaping global strategies for the world’s biggest enterprises.

The GCCs in India are only slated to grow as all the important constituencies—companies, startups, and governments—believe the contribution from this segment is only going to increase in the near future.

As Padmanabhan says, “India isn’t a pitstop on the global tech highway anymore. It is the highway.”