Global Capability Centers (GCCs)in Indiahave drastically evolved in the last two decades. They are no longer offshore units fulfilling support functions for their global enterprises; rather, they have emerged as innovation centers, driving the digital transformation of their global counterparts.
Today, India hosts over 1800 GCCs and the number is projected to grow to 2400 by FY 2030. On average, they contribute about US$68 billion, i.e. 1.6% to the country's Gross Domestic Product (GDP). This market is expected to reach US$100 billion by FY 2030. Imagine the potential that India holds!
Digital Transformation in Global Capability Centers
GCCs are a hub of technological innovation and advancements. According to NASSCOM research, more than 70% of GCCs in India are actively driving digital transformation initiatives for their parent company, focusing on advanced digital innovation, includingGenAI, Artificial Intelligence, Machine Learning, IoT, Data Analytics, Cloud Computing, Blockchain, Cybersecurity, AR/VR, Big Data, and Robotic Process Automation.
GCCs in India are playing a critical role in accomplishing the growth, operational and technological objectives of their parent enterprise. This shift from merely executing processes to developing technologies, products, and services has been fueled by robust IT infrastructure, a vast pool of highly skilled professionals, increasing focus on innovation, and a thriving startup ecosystem.
India produces over 2.25 million STEM graduates annually who are skilled in emerging technologies like data science, cloud computing, artificial intelligence and IoT. The vast availability of tech-savvy professionals ensures that GCC can meet its global standards.
India's low-cost advantage proves to be beneficial for global firms to optimise resources and reduce overhead expenses, maximising their ROI. For context, low operating costs in 2-tier cities can reduce overhead expenses by 60%.
Besides, the government's supportive policies and initiatives further drive GCC growth in India. Some of the key initiatives of the government to boost the GCC footprint in India are
- Introduction of a single-window digital portal that reduced GCC incorporation time from 6 months to a mere 15 days.
- Initiatives like 'Make in India' and digital economy reforms boost innovation, infrastructure and global competitiveness.
- Relaxed FDI norms to encourage global companies to invest in India.
- Efforts to streamline regulatory frameworks and advanced pricing rulings to bring more clarity in GCC operations.
- Boosting digital and physical infrastructure in the form of development of integrated Digital Economic Zones and investment of ₹1.39 lakh crore in BharatNet, further support GCCS in India.
Global Firms Leveraging India's GCC
India has earned the title of being the 'GCC Capital' of the world by hosting more than half of the GCCs globally. Leading global organisations are leveraging GCCs in India to innovate their business, develop advanced technologies, develop scalable solutions, and strengthen their competitive position. Some of the top global firms that have set up their global capacity centers in India are Microsoft, Amazon, IBM, Goldman Sachs, Walmart, Citibank, Bosch, Intel, and Airbus.
With more and more global firms seeing India as their global capacity centers, the country is fast developing its infrastructure and ecosystem to support them. The country is investing heavily in developing advanced data centers, IT parks and communication networks to serve global companies. In fact, several top-tier cities across the country have developed specialised hubs for specific industries.
For example, Bengaluru has emerged as India's leadingtechnology and IT hub,often referred to as the 'Silicon Valley of India'.It has become a preferred destination for global tech companies. Hyderabad, on the other hand, has emerged as a specialised destination for the pharmaceutical industry, often called the'Pharma Hub of India'. And, Delhi and Mumbai have established themselves as epicenter for financial services, banking and insurance GCCs.
Beyond metro cities, India is working on developing the infrastructure and ecosystem in tier 2 and 3 cities. Some of the prominent locations that have a huge potential for GCC in India are Visakhapatnam, GIFT City, Indore, Chandigarh, Jaipur and Coimbatore, among others. GIFT City is a great example of this. It is successfully leveraging its world-class infrastructure, regulatory framework and targeted incentives to serve global companies including HSBC, IBM, Oracle, Bank of America, Standard Chartered, and many more.
Way forward
GCCs in India are driving digital transformation for their global firms while offering competitive advantages. Global firms can tap into India's dynamic ecosystems and advanced technologies to develop innovative and forward-thinking solutions across industries.
To make this journey easy, global enterprises can partner with GCC enablers like IMC Group. We help you leverage India's dynamic GCC ecosystem and assist you in your next phase of growth.
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.
