Mumbai: Global Capacity Centres (GCCs) in India have evolved significantly over the years, transitioning from being mere ‘back offices’ for multinational companies to playing a crucial role in the technological and strategic development of the Indian ecosystem. Once primarily seen as cost-saving hubs, GCCs are now recognised as critical to innovation, contributing significantly to business growth and expansion.
Initially established to offload less important tasks from global corporations, GCCs now support a range of essential business functions, including IT services, finance, and customer support. They have become vital hubs for multinational companies, enabling the seamless execution of these functions while cutting operational costs.
The Evolution of GCCs: From Cost-Saving to Innovation
In recent years, the role of GCCs in India has drastically shifted. Today, many of these centres are directly aligned with their corporate counterparts, playing an integral role in shaping business strategies. No longer limited to their traditional cost-cutting function, GCCs now drive technological innovation, shaping the future of industries worldwide.
With around 1,500 GCCs employing more than 1.66 million people, these centres have become an important part of India’s economy, generating annual revenues of approximately USD 64.4 billion. This transformation has been largely fuelled by India’s rapid technological advancements and digitalisation.
India’s Growing GCC Ecosystem
India’s GCC market is poised for substantial growth, expected to surpass USD 100 billion soon. This growth aligns with India’s broader ambition of becoming a USD 1 trillion digital economy. Karnataka, in particular, has emerged as a leading hub for GCCs, hosting one-third of India’s centres. The state’s capital, Bengaluru, has earned a reputation as India’s ‘Silicon Valley,’ becoming the second-largest global hub for AI talent.
Karnataka’s leadership in innovation, demonstrated by its top ranking in NITI Aayog’s Innovation Index, positions the state as a vital player in India’s GCC ecosystem. Its thriving tech landscape, abundant talent pool, and strong government support make it an attractive location for new Global Capacity Centres.
Karnataka’s Global Capability Centre (GCC) Policy: A Blueprint for Growth
In response to the growing demand for GCCs, the Karnataka Global Capability Centre (GCC) Policy 2024–29 was developed to create an ecosystem that nurtures these centres. The policy is structured around four key pillars, all designed to support the growth and success of GCCs in the region.
Talent Development: The policy emphasises developing a skilled workforce, enabling people to take on demanding roles within the GCC market. By investing in education and training, Karnataka aims to equip individuals with the necessary skills to thrive in this fast-paced industry.
Collaboration & Networking: Karnataka aims to strengthen the existing local GCC network, encouraging collaboration between centres and fostering shared idea generation. This interconnected network will help companies innovate more effectively and efficiently.
Infrastructure & Incentives: The policy includes provisions for infrastructure development and financial incentives, such as rent reimbursements, stipends, and EPF contributions. These incentives are designed to make it easier for GCCs to establish and expand their operations in Karnataka.
Ease of Business & Scalability: To further support the growth of GCCs, the policy focuses on simplifying regulations and improving the ease of doing business. By reducing bureaucratic red tape, Karnataka aims to attract even more global companies to establish GCCs within the state.
With the goal of attracting 500 new Global Capability Centres by 2029, the policy is expected to create 3.5 lakh jobs and generate an additional USD 50 million in revenue for the Indian economy. By focusing on innovation and talent development, Karnataka is positioning itself as a leader in the global GCC market.
The Future of GCCs in India
As the GCC ecosystem in India continues to evolve, the country is poised to become a key player in the global tech industry. With the support of forward-thinking policies like Karnataka’s GCC initiative, India’s Global Capacity Centres will drive both technological innovation and economic growth in the coming years. By fostering an environment that encourages collaboration, innovation, and scalability, Karnataka is leading the way in shaping the future of GCCs.
In conclusion, the rise of GCCs in India marks a new chapter in the country’s tech landscape. As they continue to evolve from cost-saving units into innovation hubs, GCCs will play a pivotal role in driving India’s growth as a global technological powerhouse.
