As global businesses continue to evolve, India has emerged as a preferred destination for establishing Global Capability Centres (GCCs). These centres are not merely cost-saving hubs — they have matured into strategic units contributing to product development, finance, operations, analytics, and compliance functions for companies headquartered across geographies.
This article outlines why India is being increasingly considered for building GCCs, what factors to evaluate before establishing one, and how organisations typically structure their India presence.
Why India?
India's appeal as a GCC location stems from a combination of:
- Skilled Workforce: The availability of professionals in engineering, finance, data sciences, legal, and compliance continues to support complex business processes.
- Cost Efficiency: While cost remains a factor, businesses now increasingly consider long-term value, innovation potential, and governance support from Indian teams.
- Ecosystem Maturity: Key cities such as Bengaluru, Hyderabad, Pune, and NCR offer infrastructure, recruitment depth, and a growing base of experienced professionals who have worked in global delivery environments.
When Should a Business Consider a GCC in India?
Setting up a GCC may be suitable when an organisation:
- Has a recurring and growing need for strategic functions to be executed from a single offshore location
- Requires direct management of its offshore team's culture, work quality, and data/IP protection
- Is scaling and seeks operational continuity across time zones
Structuring Options for Building a GCC
Foreign companies generally explore two pathways when entering India for strategic hiring:
1. Setting up a Legal Entity in India
- Typically done via incorporating a Private Limited Company
- Offers flexibility for branding, issuing local employment contracts, managing funds, and billing Indian clients (if applicable)
- Enables direct control over governance, statutory compliance, and long-term strategic planning
Illustrative scenario: A North American technology company looking to house its finance and compliance support team in India incorporated a private limited subsidiary. This allowed structured payroll, employee benefits, and alignment with global reporting.
2. Hiring through an Employer of Record (EOR)
- Enables hiring local talent without setting up a legal entity
- Employees are on the rolls of an Indian entity (the EOR), while the foreign company manages their work
- Helps in market testing and team building without immediate long-term legal commitments
Illustrative scenario: A European company exploring expansion piloted an Indian team via the EOR route, gradually scaling before considering formal incorporation.
Key Compliance and Operational Considerations
Building and operating a GCC in India requires attention to:
- Regulatory registrations (ROC, PAN, GST, etc.)
- Labour law adherence (PF, ESIC, Shops & Establishment, Gratuity, etc.)
- Employment documentation (contracts, HR policies, ESOPs if any)
- Accounting, audit, and tax compliance
- Data protection and IP controls, aligned with global practices
A Coordinated Advisory Approach
Setting up and scaling a GCC in India involves interaction with multiple regulatory regimes — from corporate law to taxation, HR compliance, and payroll administration. Many foreign entities find that working with separate advisors for each function can lead to delays or conflicting advice.
R. Arora & Associates, a multidisciplinary teir 1 chartered accountancy firm, has worked with international clients across various sectors to support their India entry and operational scale-up. The firm's integrated approach allows for cross-functional coordination, with professionals across company law, taxation, HR compliance, and regulatory advisory working together seamlessly.
By offering a single point of contact for compliance, structuring, and operational support, R. Arora enables companies to navigate India's regulatory environment with greater clarity and reduced friction.
Conclusion
India's strength as a GCC destination continues to grow — but so does the importance of setting things up right. Whether an entity begins with a pilot team or moves directly into incorporation, success depends on the ability to manage cross-border compliance, governance, and operational continuity.
Firms with experience in working with foreign entities, such as R. Arora & Associates, can offer structured, informed guidance on each step of the journey — ensuring that the GCC adds not just cost savings, but strategic value to the global organisation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
