GCCs to take wider and deeper strides in India
Global companies across sectors are keen to go beyond the top metro cities and set up global capability centres in Tier II centres, taking advantage of the distinct advantages they provide. They are also looking to add capacity in existing centres.
Global capability centres (GCCs)—the shining light of the $280-billion plus technology services and solutions industry in India—are expected to expand their presence, deeper and wider, in the days to come.
Global companies across sectors are keen to go beyond the top metro cities and set up capability centres in Tier II locations. Cities such as Jaipur, Indore, Coimbatore, and Bhubaneswar, are fast emerging as the new hotspots for GCCs, offering a distinct cost advantage, a skilled talent pool, and the promise of lower attrition.
Existing centres in metro cities such as Chennai, Bengaluru, and Hyderabad will also add employees and newer capabilities, especially in the field of AI.
By 2030, GCCs are expected to add a million people to their current workforce.
The rise of GCCs in India has been bolstered by the specific GCC policies of several state governments.
Apart from the governments of Karnataka, Tamil Nadu, Andhra Pradesh and Telangana, states such as Uttar Pradesh, Gujarat and Maharashtra have also announced policies to facilitate the setting up of GCCs and create a dynamic, innovation-driven ecosystem that strengthens infrastructure and provides high-skilled employment.
Automotive GCCs in India are driving global innovation
According to industry estimates, there are over 1,800 GCCs in India, employing more than 2 million people, who account for around 35% of the headcount in the technology services sector as a whole.
GCCs in India generated revenues of $64 billion in FY24, and the figure is expected to touch $100 billion by FY30.
The progress made by GCCs has not been sudden but is the result of a silent and steady evolution over the years.
While earlier offshoring centres offered labour cost arbitrage for non-core tasks and back-office support, modern GCCs today operate as strategic, in-house hubs steering innovation, research and product development, and other high-value functions for their parent companies.
Earlier, global companies headquartered in developed economies, especially North America and Western Europe, outsourced a portion of their functions to third-party entities. It is precisely in this area of IT services that Indian companies, including Tata Consultancy Services, Infosys, Wipro, and HCLTech, turned into billion-dollar giants.
Over time, MNCs understood the importance of having their own technology centres. The need to preserve their IP, which gives them a competitive edge, led to the creation of captive technology centres or GCCs, as they are commonly called. Many of them sprang up in India, and today the country has firmly established itself as a global GCC hub.
What’s more, it’s not just technology companies that are setting up such centres, but companies in the BFSI, manufacturing, consumer goods, pharmaceuticals, and automotive industries are also doing so. These include JP Morgan, Wells Fargo, Morgan Stanley, and Fidelity. Apart from large companies, mid-sized firms are also jumping on the bandwagon.
Industry observers believe this trend will only grow deeper and wider as more and more companies, including micro enterprises, set up such centres across the country. Reports indicate that India can potentially have around 2,500 GCCs by 2030.
The driving force is talent. There was a time when IT professionals viewed jobs in GCCs with scepticism due to the perceived notion of a lack of career opportunities. But today the tables have turned. GCCs are able to attract talent with competitive compensation and benefits, and exciting opportunities to work on cutting-edge technology and complex global problems.
Despite all the political clamour over outsourcing jobs to India, especially in the United States, the GCC run is here to stay and will only get stronger in the coming days.
Edited by Swetha Kannan