Policy Update
Soorya Subbu
Inception
A Global Capability Center (GCC) is an establishment that helps a company use global talent and technology to upgrade its business. The Global Capabilities Center (GCC), also referred to as Global In-house Center (GIC) was established in 1985 in Bengaluru. An R&D center set up by Texas Instruments marked the need for the commencement of GCC in India. It was India’s first multinational Software Design Center. This center captured the spirit of those days- Advanced Satellite Communication Equipment to facilitate bullock carts, which enabled real-time collaboration with Texas Instrument’s US headquarters.
Soon, Indian engineers in Bangalore were contributing virtually to every product on their global portfolio, from sophisticated Digital Signal Processors to Mixed-signal Integrated Circuits. This proved that India could deliver not just cost-efficient work, but cutting-edge innovation. Later, in the 1990s, various organizations began moving to developing countries for cost-effective operations and skilled talent, which necessitated the growth for GCC in India. Basically, GCCs are offshore facilities set up by Multinational Corporations (MNCs), turning India into an innovation hub and a Center of Excellence (CoE).
The drive continued into the 2000s, with many companies establishing centers across the nation in cities like Bengaluru, Mumbai, and Chennai. The 2010s saw another huge rise as technology leaders like GOOGLE built large offices in Hyderabad and Bengaluru for Cutting-edge product development and research, whereas, APPLE chose Hyderabad for its renowned Apple Maps development center.
Functioning of the GCC
The GCCs main functions include integration with the parent company, talent management, operational efficiency, innovation and R&D, and governance and compliance. With these key functions, the GCC ensures that all operations are done based on domestic and international laws and regulations. The GCCs provide a wide range of services like Research and Development, Finance, IT services, Customer services, Human resources, Business process outsourcing, and Engineering services. GCCs help companies to access talent, reduce costs, improve efficiency, and drive innovation.
The GCCs in Indian cities function in different fields. Bengaluru- Leads in R&D and innovation, Hyderabad- AI powerhouse, Mumbai-Pune corridor- Dominant in Banking, Financial Services and Insurance (BFSI) and automotive technology, NCR- Builds scale in business innovation, and Chennai- Maintains stability while excelling in engineering.
Initially, their support was only to enhance IT sector and back-office operations. Later on, GCC extended its support in the finance and accounting, customer support, and data entry sectors. The potential of GCCs were identified and companies began to see strategic values. This included a shift from cost efficiency to value efficiency, innovation, defined business goals, and more focus on process improvements. GCCs can cater according to our needs with various models, structures, and operations.
Image source: ALCOR Life Extension Foundation.
Performance of the GCC
The GCC started off in tier I cities- Bengaluru, Hyderabad, Chennai, Delhi, and Mumbai. The Union Budget of 2025 has brought in tier II cities for better growth and expansion of GCCs in India. Tier II cities like Coimbatore, Jaipur, and Visakhapatnam are expected to be ready for new ventures with improved infrastructure, advantageous state legislation, lower real estate and manpower prices. Since, India is rich in skilled software engineers, data scientists, business analysts, and various other technical professionals, it paves the way for high-quality software development that supports businesses across various industries.
Many US firms account for the majority of the operations of GCCs in India, followed by around 35% of European firms in the country. APAC- based GCCs are ramping up now, when compared to previous numbers. Incentives and initiatives provided by the Indian government have been supportive of setting up Global Capability Centers (GCCs) to attract foreign investment. Special Economic Zones (SEZs) set up by the government allows the companies to set up GCCs and have access to various tax incentives and other benefits that help in the overall progress and development.
The National Framework of GCC in the Union Budget 2025 aims at increasing GCCs in tier-II cities. Their main areas of focus will be on skill development, infrastructure, AI focused Centers of Excellence for agriculture, health, and sustainable cities. Fostering sustainable growth is the key concept of GCC in this year’s budget.
The GCC’s Impacts
The Global Capability Centers (GCCs) have significantly impacted India’s domestic economy by creating more opportunities in the employment sector, advancements in technology and skill developments. Successful implementation by GCC includes Morgan Stanley, Goldman Sachs, and Visa by enabling them to leverage talent and stay ahead in the global market.
India is home to more than 1,800 Global Capability Centers (GCC). As per the Union Budget of 2025, GCCs in India are set to provide nearly 4.25-4.5 lakh new jobs this year and around 3.3 million employed professionals by 2030. The report released by the government also shows a sharp rise in hiring women. 61% of GCCs are considering increasing their female workforce by over 50% by 2030, with a significant leap of 7% this year.
The growth of GCC has helped India in becoming a major player in Asia’s global business and information technology services industry. India hosts about 50% of the GCCs, contributing over $64 billion in FY 2024 alone. The national framework also introduced in the FY26 Budget is expected to accelerate growth, especially in tier II and tier III cities.
Emerging Issues faced by GCCs
This policy aims at the broader goal of job decentralization. GCC aims to provide employment to every individual with the help of MNCs and its growth in tier I and II cities. Issues that concern GCC may include equal distribution of workload across India. Artificial Intelligence, blockchain, and novel customer experience are rewriting the rules from 2025 and beyond. India has to be updated with the emerging technological advancements, along with fast-track compliance and reimagining customer engagement. Continuous innovation and the need to remain ahead in the global market are a few other challenges that GCCs in India may face. Increasing financial complexities caused by unstable markets are also concerning factors to the rapid growth of GCCs.
Since GCCs are essential for innovation and data management, they face an increasing cybersecurity threat, including data breaches, ransomware attacks, and Advanced Persistent Threats (APTs). Cloud, IoT, phishing attacks, insider threats, malware, cyber espionage, and industry 4.0 cybersecurity challenges are a few other issues that the GCCs face. Infrastructure challenges such as power outages, unreliable internet, and traffic congestion, impacting productivity and operational stability are other factors that slow down the growth of GCCs in India. Amongst these, cultural challenges also play a vital role in the success of GCCs. Though, there are more to this in the deeper level, the growth of GCC is definitely phenomenal.
Way Forward
India has long been recognized as a global leader in the IT sector and this attracts more MNCs to pivot their businesses towards India. The initial six cities have marked the way to a long road filled with success. It is a big achievement for the entire nation.
The expansion of GCCs in tier II cities with lower operational costs and growing pool of educated professionals leads to regional economic development and provides a more evenly distributed network of GCCs across the nation. GCCs aim to contribute 3.5% of India’s overall GDP by 2030 as per the Union Budget released by Finance Minister Nirmala Sitharaman on February 1, 2025. The expansion of GCCs in India will certainly create numerous job opportunities, and foster skill development, while allowing India to attract more MNCs with a competitive edge.
References
- ACCENTURE, 2025, “What is a Global Capability Center?” https://www.accenture.com/id-en/insights/what-is-global-capability-center
- ANSR, 2025, “Global Capability Centers- A flexible, no-capex, subscription based engagement model” https://ansr.com/global-capability-center/
- Dmytro Ovcharenko, 8 Jan, 2025, ALCOR, “Set up Your Global Capability Center” https://alcor-bpo.com/global-capability-center-setup/
- ET EDGE, 21 Mar 2025, “GCC Summit 2025| Transforming Global Capability Centres in India” https://et-edge.com/conferences/gcc/
- IBEF, 7 Feb, 2025, IBEF: INDIA BRAND EQUITY FOUNDATION, “Global Capability Centres (GCCs) to create 4,50,000 new jobs in 2025 as companies plan to expand: Report” https://www.ibef.org/news/global-capability-centres-gccs-to-create-4-50-000-new-jobs-in-2025-as-companies-plan-to-expand-report
- Nitika Goel, Sachit Bhat, 17 Jan, 2025, ZINNOV, “How 6 Indian Cities Made India “The GCC Capital”” https://zinnov.com/centers-of-excellence/how-6-indian-cities-made-india-the-gcc-capital-blog/
- Perspectives, 4 Mar 2025, HSBC, “What are Global Capability Centres (GCC) in India?” https://www.businessgo.hsbc.com/en/article/what-are-global-capability-centres-gccs-in-india
- PWC, 2025, “Global capability Centres” https://www.pwc.in/services/global-capability-centre-gcc.html
- Samantak Das, Rohan Sharma, Anita Subramanian, 17 Sept, 2024, JLL, “GCC Guide 2024- Explore the rise of Global Capability Centers in India with our research. Uncover benefits, challenges, and strategies for successful GCC setup in the country” https://www.jll.co.in/en/trends-and-insights/research/the-rise-of-global-capabilities-centres-in-india#:~:text=GCCs%20of%20today%20handle%20more,employ%20over%201.3%20million%20people.
- Shyamala Rajan, 2025, THIS TORY HARRIS, “Global capabilities center- Transforming business operations and driving success” https://www.torryharris.com/knowledge-zone/global-capability-center#:~:text=GCCs%20first%20came%20about%20in,support%20and%20back%2Doffice%20operations.
- Trends Report, 2025, NEWGEN, “Shaping The Future of GCCs in 2025” https://newgensoft.com/resources/report-gcc-2025/
About the author: Soorya Subbu is a research intern at the Impact and Policy Research Institute (IMPRI), with a master’s degree in international Studies and a bachelor’s degree in Journalism. Her areas of interest include international relations, public policy, analysis and global affairs.
Acknowledgement– The author would like to thank Dr. Arjun Kumar, and Mallika who helped throughout this article and reviewed the same.
Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organisation.
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