India has emerged as the undisputed global leader in Global Capability Centres (GCCs), hosting over 1,800 centres serving 1400 unique global corporations under the leadership of Prime Minister Narendra Modi. These captive hubs, which manage critical functions like analytics, technology support, product development, and innovation for multinational corporations, are redefining India’s role in the global economy. According to a NASSCOM-KPMG report, India’s GCC ecosystem, with a market size of $64.6 billion in 2023-24, up from $19.6 billion in 2014-15, and an annual growth rate of 11.4%, is a powerhouse driving economic transformation.
Employing over 19 lakh people, GCCs deliver high-value services, generate $3 for every dollar invested, and create five local jobs for every GCC role, positioning India as a global hub for innovation and competitiveness.
A Strategic Triumph: India as the GCC Capital
India’s rise as the GCC capital is no coincidence but the result of a carefully crafted strategy. The country’s business-friendly environment under PM Modi’s leadership, bolstered by initiatives like Ease of Business, Make in India, and Digital India, has created a fertile ground for GCC growth. The introduction of the Simplified Proforma for Incorporating Company electronically Plus (SPICe+) streamlined company registration, while the Jan Vishwas (Amendment of Provisions) Act of 2023 decriminalised 183 provisions across 42 central acts, reducing compliance burdens and fostering a pro-business climate. The Modi government’s Make in India policies, including 100% FDI in key sectors and tax exemptions in Special Economic Zones (SEZs), have attracted global corporations.
From Cost Centres to Innovation Hubs
The Digital India initiative brought in by the PM Modi-led government has been instrumental in equipping India’s youth with the digital proficiency needed to meet GCC demands. By expanding access to high-speed internet and digital infrastructure, Digital India has bridged the urban-rural divide, enabling youth from diverse regions to participate in the global economy. The launch of Skill India Digital Hub in 2023 by the PM Modi-led government has further accelerated this transformation. New concepts like introduction of Digital CVs via personalised QR Codes where a simple scan, potential employers or partners can access a digital portfolio summarising an individual's skills, qualifications, experiences, and achievements. by coordinating efforts between the central and state governments, private organisations, and higher education institutions to deliver cutting-edge training in areas like artificial intelligence (AI), cloud computing, and data analytics.
India’s GCCs have evolved from traditional outsourcing hubs to Centres of Excellence (CoEs), focusing on high-value functions like research and development (R&D) and intellectual property (IP) creation. This shift has transformed GCCs into profit centres, offering competitive compensation on a global scale and delivering value far beyond cost arbitrage. By leveraging India’s abundant, skilled talent pool and advanced infrastructure, including high-speed internet and state-of-the-art facilities, GCCs are driving innovation and positioning India as a global leader in the digital economy, which is projected to contribute nearly 20% of the nation’s economy by 2030.
Strategic Expansion into Tier 2 and 3 Cities
The growth of GCCs is not limited to India’s metropolitan hubs. Tier 2 and 3 cities like Ahmedabad, Hyderabad, Kochi, Visakhapatnam, Jaipur, and Coimbatore have emerged as attractive destinations for multinational corporations. These cities offer lower operational costs and access to diverse, high-quality talent, creating a win-win scenario. The expansion has catalysed local economic growth, boosting demand for real estate, hospitality, retail, and transportation. Collaborations with startups, universities, and research institutions have further integrated GCCs into local ecosystems, fostering innovation and sustainable development.
India’s Competitive Edge Over Global Rivals
India’s GCC ecosystem stands out against competitors like Malaysia, Vietnam, and the Philippines. While these countries offer competitive labour costs, they lag in scale, infrastructure, and talent production. India’s advanced physical and digital infrastructure, coupled with its thriving GCC ecosystem, sets it apart. The Philippines remains focused on business process outsourcing (BPO), while Malaysia and Vietnam struggle to match India’s talent pool and innovation-driven environment. India’s rapid setup rate, driven by talent availability, cost advantages, and a supportive ecosystem, ensures its dominance in the global GCC landscape.
A Multiplier Effect on the Economy
GCCs are not just job creators but economic multipliers. For every job created within a GCC, five additional jobs are generated in the local economy, fueling growth in ancillary sectors. The surge in GCC activity has transformed cities into thriving business hubs, with ripple effects across real estate, hospitality, and transportation. By fostering partnerships with local ecosystems, GCCs are driving innovation and positioning India as a global leader in the next industrial revolution.
Looking Ahead: Outpacing the World
As per the NASSCOM white paper, published in November 2024, “India's GCCs are not only growing in number but also in complexity and strategic importance. Over the past 5 years, more than half of these centres have evolved beyond traditional service roles to operate as portfolio and transformation hubs, integrating a broad scope of high-impact functions.”
India’s GCCs are no longer just back-office support systems; they are strategic assets driving global innovation and economic growth. With a robust policy framework, a skilled workforce, and a focus on high-value functions, India is outpacing traditional outsourcing models and setting the stage for the next global revolution. As the digital economy continues to grow, India’s GCCs will remain at the forefront, shaping the future of global business and cementing the country’s position as a powerhouse of innovation and value delivery.