Global Capability Centres (GCCs) in India: Demand, Evolution, Benefits, & More!

What are Global Capability Centres?

Global Capability Centres (GCCs) or Global In-House Centres (GICs) are offshore facilities established by multinational companies to manage various business functions internally.

Unlike traditional outsourcing, where third-party vendors control operations, GCCs provide companies with direct oversight, ensuring alignment with corporate goals and strategic objectives.

Initially focused on administrative and IT support, GCCs now handle high-value functions such as research and development (R&D), product engineering, financial services, cybersecurity, and AI-driven analytics.

These centres allow MNCs to centralise expertise, enhance efficiency, and drive long-term business growth.

GCCs vs Traditional IT Outsourcing

There are a few differences between GCCs and traditional IT outsourcing, such as:

Control & Oversight

GCCs operate as internal units of a company, allowing direct involvement and accountability. Outsourced functions, in contrast, are managed externally, often leading to delays and misalignment with business strategies.

Integration with Core Business

GCCs seamlessly integrate with an organisation’s key operations, boosting innovation and agility. Outsourcing, however, is often transactional and lacks long-term strategic benefits.

Innovation & Research

Unlike outsourcing, which focuses on cost savings, GCCs encourage research and the development of proprietary technologies, ensuring companies stay competitive.

Strategic Growth

GCCs also play a significant role in digital transformation, process optimisation, and business scalability, while outsourcing primarily addresses immediate operational needs.

Key Functions and Services

GCCs in India support businesses by offering services like:

• Custom software development and IT infrastructure management
• Advanced cybersecurity and risk mitigation strategies
• R&D and product innovation
• Financial process automation and legal process outsourcing (LPO)
• AI and machine learning-based solutions for data analytics

The Evolution & Ongoing Demand for GCCs in India

The journey of Global Capability Centres (GCCs) in India began in the late 1990s and early 2000s, with pioneering companies like GE, Citibank, and American Express establishing offshore units for IT services and BPO, primarily focusing on cost reduction.

By the mid-2000s, this landscape broadened to include R&D, financial services, and KPO, as multinational corporations recognised India's potential for high-value strategic operations and invested in innovation-driven centers.

In the 2010s, GCCs further evolved into global innovation hubs, actively contributing to AI development, big data analytics, and cloud computing, becoming major drivers of digital transformation and process optimisation.

Today, these centers are an important part of a global business strategy. With ongoing advancements and government support, India is set to remain a dominant player, offering a dynamic and innovation-friendly environment for business growth.

Why are MNCs Setting Up GCCs in India?

Several factors contribute to India’s growing appeal as a preferred destination for GCC investments, such as:

• Skilled Talent Pool: India produces many STEM graduates annually, providing companies with highly qualified professionals in technology, finance, and engineering.
• Cost-effectiveness: Labour and operational costs in India are significantly lower than in Western markets, allowing businesses to optimise budgets while maintaining quality.
• Favourable Business Environment: Government incentives, tax benefits, and a strong IT infrastructure make India a lucrative destination for global companies.
• Growing Startup Ecosystem: With over 1,59,157 startups as of January 15, 2025, India boosts innovation, offering an ecosystem that supports cutting-edge research and business scalability.

Current Market Trends and Growth Statistics

India’s GCC landscape has expanded significantly over the last decade:

• Over 1,900 GCCs are operational today, with projections to exceed 2,100 by 2028.
• The sector contributes approximately $64.4 billion annually to the Indian economy.
• Emerging technologies such as AI, cloud computing, and IoT are increasingly integrated into GCC operations, driving business efficiency and global competitiveness.

What are the Benefits of Global Capability Centres in India?

There are several benefits of Global Capability Centres (GCCs) in India for businesses, such as:

1. Cost Savings and Operational Efficiency

One of the primary advantages of establishing a GCC in India is the significant reduction in operational costs. Compared to Western markets, companies benefit from lower labour expenses, real estate costs, and general business expenditures.

Additionally, streamlined processes and automation improve operational efficiency. For example, multinational corporations like IBM and Accenture leverage their Indian GCCs to optimise global service delivery while maintaining cost-effectiveness.

2. Access to Specialised Talent and Skills

India’s highly skilled workforce is a major draw for businesses setting up GCCs. With a vast pool of engineers, IT specialists, and data scientists, companies can access top-tier talent to drive innovation and efficiency.

Many organisations collaborate with premier Indian institutions, such as IITs and IIMs, to recruit skilled professionals. For instance, J.P. Morgan’s GCC in Bengaluru focuses on advanced financial analytics, tapping into the country’s fintech expertise.

3. Innovation and Technology Advancements

GCCs in India are increasingly transitioning from back-office operations to centres of excellence for innovation. Companies utilise their Indian operations to develop cutting-edge solutions in artificial intelligence, cybersecurity, and cloud computing.

Microsoft’s India GCC, for example, plays a significant role in AI research and product development, contributing to global technological advancements.

4. Strategic Advantages and Global Reach

Having a GCC in India further allows businesses to establish a strategic foothold in one of the world’s fastest-growing economies. The time zone difference enables round-the-clock operations, enhancing service delivery for global clients.

Moreover, Indian GCCs act as strategic hubs for market expansion in the Asia-Pacific region. For example, Deloitte’s GCC in Hyderabad facilitates seamless integration between its global teams, ensuring enhanced service delivery across multiple geographies.

Prominent Cities & Industrial Developments in India’s GCC Sector

Global Capability Centres (GCCs) in India span major cities and industries, including finance, IT, AI automation, digital engineering, pharma, and manufacturing– each offering unique advantages.

Below, we’ve listed the top 5 cities prominent for industry-specific innovations, skilled talent, and government-backed policies promoting expansion.

Hyderabad

Evolving into a central GCC hub, Hyderabad is home to Fortune 500 companies like Amazon and Roche. Innovation centers like T-Hub and WE-Hub are boosting tech startups and women-led businesses, while HITEC City and the Financial District support seamless operations. The BFSI sector, in particular, has witnessed immense growth, with 49% of total office transactions in the city driven by GCCs.

Bengaluru

Known as the 'Silicon Valley of India,' Bengaluru leads the country’s GCC ecosystem, hosting over 875 units. IT corridors like Electronic City and Outer Ring Road house giants like JPMorgan Chase, HSBC, and Walmart. The Karnataka GCC Policy (2024-2029) is set to enhance the sector with infrastructure grants, tax reliefs, and AI-friendly policies, aiming to establish 500 new GCCs by 2029.

Mumbai

As India’s financial capital, Mumbai attracts BFSI-focused GCCs like Barclays and Citibank, alongside a growing pharma sector. Business districts like BKC, Powai, and Lower Parel offer robust infrastructure, while premier institutions like IIT Bombay provide a skilled workforce. Mumbai’s global connectivity and financial expertise make it a preferred choice for regulatory and compliance-driven operations.

Delhi NCR

With 15-18% of Indian GCCs based in Noida and Gurgaon, Delhi is also becoming a prime hub for BFSI, professional services, and tech firms like Uber, Siemens, and Nokia. The presence of startup unicorns, SEZs, and a well-connected metro system strengthens its appeal. Rising congestion in Bengaluru and Hyderabad has further accelerated NCR’s demand for GCC setups.

Chennai

AKA the ‘Detroit of India,’ Chennai has seen a 25% growth in GCCs in 2023-24, with over 300 centers operating in the city. It ranks third in GCC leasing activity and is a leader in R&D, engineering, and logistics-focused operations. Companies like AstraZeneca, Renault Nissan, and Ford leverage its cost-efficient IT corridors and advanced tech parks like SIPCOT and Tidel Park.

Challenges Faced by Global Capability Centres (GCCs) in India

Just like the innovation and benefits, there are particular challenges GGCs in India are facing, such as:

1. Infrastructure and Technological Constraints

Despite the commendable advancements, India still faces infrastructure challenges, particularly in second-tier cities. Issues like inconsistent power supply, high traffic congestion, and varying internet connectivity levels can affect GCC operations.

To avoid this, companies often prefer business hubs like Bengaluru, Hyderabad, and Pune for their superior infrastructure, but limitations remain compared to Western standards.

2. Regulatory and Compliance Complexities

India's rules and laws change constantly, making it difficult for GCCs to follow everything correctly, especially when keeping people's information safe (data protection), paying the right taxes, and following rules about hiring and managing workers.

Since these rules can be confusing, GCCs need lawyers and legal experts who constantly check the changing policies and ensure they follow government orders.

3. Talent Acquisition and Retention

While India offers a vast talent pool, finding and keeping the best people is challenging, especially in the Artificial Intelligence (AI), cloud computing, and data mining sectors. Plus, many of these talented people want to start their own companies instead of working for someone else, which makes it more difficult for companies to keep them.

4. Cultural and Operational Alignment

Another challenge for GCCs in India is to achieve seamless integration between them and the global headquarters. This is primarily due to variations in work culture, communication styles, and time zones. Many GCCs also face the difficulty of being viewed as secondary support functions rather than being recognised as the main centers for generating new ideas and driving innovation.

The Current Trends & Future Predictions for GCCs in India

Despite the challenges, Global Capability Centres (GCCs) in India are set to witness exceptional growth, driven by technological advancements, evolving business models, and government initiatives.

As organisations worldwide look to optimise operations and use India’s skilled workforce, several key trends will shape the trajectory of GCCs in the coming years, such as:

Expansion of AI, Data Science, and Cloud Computing

The rise of artificial intelligence (AI), data science, and cloud computing is reshaping the capabilities required within GCCs. Currently, 20-30% of work allocated to GCCs involves these domains, and this share is projected to increase to 40-50% by 2030. Organisations are prioritising digital transformation more than ever, making proficiency in these technologies a vital asset for future GCC growth.

Shift Towards Agile and Hybrid Workspaces

The traditional sprawling GCC campuses are giving way to more agile and flexible office models, including managed office spaces and hybrid work environments. Industry leaders like Microsoft have significantly invested in this transformation, offering expanded per-person workspace allocations to enhance productivity.

Rising infrastructure costs, ranging from Rs 1,800 to Rs 5,500 per square foot, further reinforce the shift toward optimised office solutions that balance cost-efficiency and functionality.

Cost Optimisation and Offshore Expansion

GCCs are also essential for helping organisations reduce selling, general, and administrative (SG&A) expenses, which comprise 12-18% of enterprise expenditures. Over 35% of Fortune 500 companies are actively shifting SG&A functions to offshore GCCs, with India positioned to capture 40% of this market, equating to a massive $210 billion opportunity.

Additionally, salaries in India and other offshore hubs are 50-70% lower than in developed economies, so GCCs offer substantial cost savings to their parent enterprises. For a detailed insight, you can read more about the cost expenditures and expansion of GCCs in India here.

Rising Presence in Tier II Cities

As Tier I cities reach saturation, GCCs plan to expand into Tier II cities such as Coimbatore, Indore, Mangalore, Bhubaneswar, and Jaipur. These locations offer a highly skilled workforce, reduced operational costs, and improved employee retention rates, making them attractive alternatives for global enterprises looking to scale efficiently.

State Governments’ Push for GCC Investment

Several Indian states are actively promoting policies to attract GCC investments. Karnataka’s GCC Policy (2024-2029) is a prime example, with incentives such as tax breaks and infrastructure support.

States like Telangana, Madhya Pradesh, Maharashtra, and Uttar Pradesh also offer favourable conditions, making India an even more attractive destination for global businesses.

More Future Possibilities for GCCs

Considering the growth of GCCs in India, the country is expected to have 4.9 million employees by 2030. To stay competitive and future-ready, GCCs are further focusing on:

• Talent Development: Investing in upskilling initiatives, career growth programs, and personalised benefits to retain and nurture top talent.
• Innovation & Digital Transformation: Using AI, machine learning, and automation to enhance efficiency and productivity.
• Sustainability & Inclusion: Prioritising sustainable business practices and promoting diversity and inclusion in the workplace.

GCCs: Transforming India into a Global Business Powerhouse!

Summing up, Global Capability Centres (GCCs) in India have evolved into a powerhouse driving digital transformation, cost efficiency, and operational excellence for multinational corporations. From utilising AI and cloud computing to expanding into Tier II cities and benefiting from government support, GCCs in India are at the forefront of global business evolution, and we’re here for it!

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