In 1985, when Texas Instruments set up an R&D centre in Bengaluru, it likely had no idea it was sowing the seeds for what would become a massive wave of global capability centres or GCCs (offshore facilities set up by multinational companies to support their parent organisations by managing a range of business functions and processes.) Bengaluru’s transformation into a global hub for innovation has been nothing short of remarkable.
With over 1,700 GCCs across India today – and 875 of them in Bengaluru alone—it’s clear that the city has become the beating heart of this movement. The reasons are clear: a thriving ecosystem, a rich pool of talent, and an environment that fosters mobility and innovation.
Today, with over 50% of the world’s GCCs based in India, this sector is fueling not only the city’s growth but also reshaping industries worldwide. What’s driving this incredible boom? And how can we leverage the opportunities it brings? Let’s dive into the factors behind this surge and why it’s such an exciting time for India and the world.
Understanding GCCs: The engines of innovation
Global Capability Centres, or GCCs, are specialised business units established by MNCs outside their home countries to leverage local talent, expertise, and infrastructure to drive global operations, innovation, and value creation. GCCs enable companies to focus on their core strengths while leveraging the expertise of centres in other regions to fuel growth and innovation.
GCCs span a wide range of sectors, from information technology and finance to research and development and even cutting-edge technologies like artificial intelligence and machine learning. By establishing a strong presence in these centres, MNCs can gain a competitive edge, adapt to local market dynamics, and harness the power of global collaboration.
The GCC landscape in India is transforming
Current landscape: A thriving ecosystem
The GCC landscape in India has witnessed a remarkable evolution. The sector contributed revenue of USD 64.6 billion in FY24 and recorded a CAGR of 9.8% between 2019 and 2024.
In fact, over 23% of the Global 2000 MNCs have established a presence in India through their GCCs.
Remarkable growth in revenue and workforce
In the last five years, Indian GCCs have experienced extraordinary growth, with a 60% increase in revenue and a 36% increase in workforce from FY 2019 to FY 2024. The workforce has expanded from approximately 1.4 million employees in 2019 to over 1.9 million by 2024.
This surge illustrates not only the confidence MNCs have in India’s capabilities but also the increasing demand for skilled professionals who can drive innovation and efficiency.
What makes India the GCC Capital of the World?
India has firmly established itself as the “GCC Capital of the World,” boasting a staggering 1,700+ GCCs as of FY24, compared to around 1,600 in the previous year. It’s a remarkable journey from simple cost-saving centres to strategic innovation hubs, and it’s transforming not just the companies involved but entire industries and communities in India.
- End-to-end product ownership
GCCs are no longer just support centres like they used to be earlier; they now enjoy high levels of autonomy and manage critical global roles directly from India. This has successfully shifted the narrative of India’s GCCs from cost savings to ‘value addition’.
Over the past decade, 44% of India’s GCCs have transitioned into what is known as the “Portfolio Hub” stage. At this level of maturity, GCCs are responsible for comprehensive portfolio management, driving innovation, and fostering collaboration across multiple functions and locations.
A prime example of this evolution is the John F. Welch Technology Centre in Bengaluru, which serves as GE’s largest research hub outside the United States. Housing over 5,000 engineers, this centre has been instrumental in achieving technological breakthroughs and product innovations, contributing more than 3,500 patents to GE’s portfolio. This success story exemplifies how Indian GCCs are pushing the boundaries of global innovation.
- Focus on high-value activities
In addition to product ownership, GCCs are increasingly concentrating on high-value activities such as digitisation and building competencies in cutting-edge technologies like artificial intelligence (AI), machine learning, and blockchain. These centres have become critical players in establishing Centers of Excellence (CoEs) across various functions—ranging from engineering research and development to IT and financial services.
For instance, HSBC’s technology centre in Pune plays a pivotal role in developing AI-driven banking solutions that streamline global operations. Far from being mere support functions, these centres are integral to managing global portfolios and enabling strategic decision-making from India.
- Driving AI-led transformation
Indian GCCs and their Centers of Excellence are at the forefront of the AI revolution, with over 120,000 AI professionals working across the ecosystem. More than 185 GCCs in India have established dedicated AI/ML CoEs, particularly in the software and internet sectors, showcasing the country’s growing dominance in emerging technologies.
Microsoft’s GCC in India, which undertakes core software development, is a great example of a GCC in India playing a crucial role in the parent firm’s global strategy by leveraging local talent.
Key themes unfolding in India’s GCC ecosystem
- Emergence as centres of excellence: Many GCCs in India have evolved into Centers of Excellence (CoEs) for specific technologies or business functions. These CoEs are driving global standards and best practices across their parent organisations.
- Expansion of global roles in Indian GCCs: Indian GCCs are becoming hubs for high-impact global roles, currently housing over 6,500 such positions. This figure is expected to cross 30,000 in the next six years, spanning functions like engineering, IT, and shared services, with many holding senior leadership positions reporting to global executives.
- Focus on sustainability and CSR: Many GCCs have embraced sustainability and corporate social responsibility (CSR) initiatives. They are actively involved in projects aimed at environmental conservation, community development, and social welfare, contributing positively to their local communities and aligning with global corporate responsibility standards.
These themes highlight the dynamic nature of the GCC ecosystem in India and its continuous evolution to meet global business needs while contributing to local development. As GCCs continue to mature and expand their capabilities, they are not only reshaping India’s economic landscape but also redefining the country’s role in the global business ecosystem.
Future outlook: Scaling greater heights
The future of GCCs in India looks exceptionally bright, with the Nasscom Zinnov report projecting the market size to reach a staggering USD 100 billion by 2030. The country is set to witness a further surge in the number of GCCs, with an estimated 2.5-2.8 million people employed in this dynamic sector by the end of the decade.
As we look ahead, the continued growth and evolution of GCCs in India will be driven by several factors, including:
- Sustained investment in talent development and upskilling to maintain a competitive edge
- Ongoing infrastructure improvements and the adoption of cutting-edge technologies
- Deepening collaborations between GCCs and Indian service providers to co-create innovative solutions
- Proactive government support and policies to foster a conducive business environment
- Increasing focus on emerging technologies, such as AI, automation, and data analytics, to drive digital transformation
In summary
It’s incredible to see how the Indian government has played a pivotal role in nurturing the growth of Global Capability Centers (GCCs). By setting up Special Economic Zones (SEZs), they’ve offered GCCs a host of tax benefits and incentives. It’s like giving these centers their own sandbox to play and innovate in.
Telangana is a prime example of success in attracting GCCs. Between October 2023 and January 2024, 14 new GCCs were established in India, with leading names like Evernorth, Lloyd’s Banking Group, and Warner Brothers choosing Telangana. The state’s world-class infrastructure, skilled talent pool, affordable cost of living, and supportive government policies have played a key role.
And it doesn’t stop there – the government’s push for innovation and R&D has given GCCs the green light to dream big and push technological boundaries. What’s really exciting is how individual states are getting in on the action. They’re crafting Engineering R&D policies and building innovation clusters that tap into India’s IT prowess and our deep pool of engineering talent. For instance, Karnataka, through its Handbook on Digital Economy Policies, Programs & Incentives, officially highlights Bangalore as the ‘preferred destination for platform engineering GCCs.’
And let’s not forget the “China Plus One” strategy – it’s opened doors for global manufacturers to see India in a new light. All of these efforts combined are creating a perfect ecosystem for GCC growth and innovation. Looking ahead, I can’t help but feel optimistic. The teamwork between the government, GCCs, and local ecosystems is setting the stage for India to shine even brighter on the global tech stage. It’s an exciting time to be in this space, and I can’t wait to see what comes next!
Disclaimer: The information contained in this document is for informational purposes only.