Multinational corporations are increasingly relying on Global Capability Centers (GCCs) to innovate and optimize their strategic operations. These centers have evolved from being mere cost-saving units to becoming crucial pillars of enterprise-wide digital transformation.
India has emerged as a global hub for these centers, owing to its vast pool of skilled professionals, cost-effective operations, and a conducive business environment. With global firms leveraging India’s capabilities in artificial intelligence (AI), automation, and data analytics, the country is witnessing rapid growth in GCC investments. In 2024, the GCC sector in India employed over 1.9 million people, with around 364,000 new jobs expected to be added by early 2025.
This blog explores the key trends shaping GCC expansion, the growth drivers fueling India’s dominance in this space, and the strategic benefits global enterprises can derive by establishing their GCCs in India.
What are GCCs and How Do They Operate
Global Capability Centers are offshore units established by multinational companies to manage various business functions, including IT support, research and development (R&D), finance, analytics, and customer service. Unlike traditional outsourcing models, these centers are owned and operated by the parent organization, ensuring greater control, security, and alignment with corporate objectives.
GCCs vs. Shared Services Centers (SSCs) and Business Process Outsourcing (BPOs)
While GCCs share similarities with SSCs and BPO units, they differ in their scope:
- GCCs focus on high-value functions such as digital transformation, AI, and cybersecurity, while maintaining a strategic role in global operations.
- SSCs typically handle back-office and support functions such as HR, finance, and payroll processing for multiple business units within the same organization.
- BPOs are third-party service providers specializing in outsourced processes, often emphasizing cost efficiency over strategy.
Optimize your global operations with high-performing capability centers in India.
The Evolution of GCCs in India: From Cost Arbitrage to Value Creation
India’s journey as a GCC hub began with companies setting up operations primarily to leverage cost arbitrage. Initially, these centers focused on IT support, call centers, and basic data processing. However, as India’s talent pool matured, these centers started handling more complex operations such as AI-driven analytics, R&D, and product engineering.
Today, GCCs in India are integral to multinational enterprises, driving innovation, automation, and strategic decision-making. Companies such as Microsoft, Google, and JPMorgan have established advanced R&D centers in India. In 2024, more than 78% of newly established capability centers in India emphasized digital capabilities, particularly in AI, machine learning, and cloud computing, reflecting the country’s significant growth in advanced technological capabilities.
Key Trends Driving the Expansion of GCCs in India
The expansion of GCCs in India can largely be attributed to the growth of the following sectors:
- Digital Transformation & AI Integration: Companies are leveraging AI/ML, automation, and data analytics to enhance operations and decision-making.
- Expanding Talent Pool: India produces over a million engineering graduates annually, providing a steady supply of skilled professionals in emerging technologies.
- Sustainability & ESG Initiatives: GCCs are embracing sustainability by adopting green energy and reducing their carbon footprint. Supportive policies, such as Uttar Pradesh’s draft GCC framework, have streamlined compliance and prioritized eco-friendly practices and ESG goals.
- Hybrid Work Models: The shift towards hybrid and remote work is enabling GCCs to attract diverse talent from across India.
Why India is the Preferred Destination for GCCs
India’s dominance in the GCC space arises from these unique advantages:
- Skilled Workforce: With a vast pool of engineers, data scientists, and finance professionals, India offers unparalleled talent availability.
- Cost Efficiency: Lower labor and infrastructure costs make India an economically viable choice for multinational corporations.
- Government Support: Favorable policies, tax incentives, and relaxed FDI regulations have made it easier for companies to set up and scale operations.
- Thriving Startup Ecosystem: India’s innovation-driven environment, backed by a strong network of startups and research institutions, drives growth in GCCs.
- Robust Digital Infrastructure: With 5G deployment, cloud computing advancements, and cybersecurity enhancements, India is well-positioned for GCC expansion.
The Financial and Operational Advantages of Setting Up a GCC in India
Setting up a GCC in India offers operational benefits beyond cost savings. Cost efficiency is a major draw, with reduced expenses on labor, office space, and utilities. India’s round-the-clock operations provide 24/7 support, using time zone advantages to enable seamless global service.
Another key benefit is that companies can quickly expand operations, onboard talent, and adapt to shifting business needs with minimal disruption. This flexibility makes Indian capability centers ideal for enterprises looking to expand globally.
Strategic Benefits for Global Enterprises
GCCs in India are not just operational centers. These centers now serve as strategic assets for multinational companies:
- Business Continuity & Risk Management: Offshore centers help mitigate risks by diversifying operations across multiple locations.
- Innovation Hubs: Many capability centers drive new product development, process automation, and digital transformation strategies.
- Cross-Functional Collaboration: Centralized knowledge management fosters better coordination across different business units.
- Standardization of Global Processes: Enterprises can ensure consistency and compliance across multiple regions.
Challenges in Setting Up a GCC in India
To successfully integrate these centers, it’s important to understand the complexities that come with their establishment. Key challenges to anticipate in a GCC set-up include:
1.Regulatory and Compliance Complexities
India’s regulatory landscape can be intricate, with shifting tax policies, labor laws, and compliance requirements. Companies need expert guidance to navigate these legal frameworks smoothly.
2. Talent Retention in a Competitive Market
While India boasts a vast talent pool, the high demand for skilled professionals leads to increased attrition rates. Enterprises must invest in strong retention strategies, employee engagement programs, and career growth opportunities.
3. Cultural Integration with Global Teams
Aligning Indian GCC operations with the parent company’s culture and work ethics can be challenging. Cross-cultural training, leadership alignment, and effective communication frameworks help bridge this gap.
4. Cybersecurity & Data Protection
With GCCs handling sensitive business data, ensuring robust cybersecurity measures is crucial. Companies must implement strict data protection protocols, comply with global security standards, and regularly update risk mitigation strategies.
Tap into India’s thriving digital ecosystem and skilled workforce to build a high-impact capability centers.
The Next Wave of GCC Growth in India
As global enterprises continue to recognize India as a hub for innovation and operational excellence, the role of capability centers is set to evolve beyond traditional service delivery.
- Rise of Tier-2 and Tier-3 Cities: With digital infrastructure improvements, more capability centers are expected to set up operations beyond metro hubs. Tier-2 cities such as Jaipur and Coimbatore are emerging as new GCC hotspots due to rising costs in Tier-1 cities and favourable policies.
- Advanced Technology Integration: AI, blockchain, and cloud computing will play an even greater role in restructuring operations.
- Greater Influence in Enterprise Strategy: Capability centers will move beyond execution and actively participate in global decision-making and innovation.
How Can Enterprises Establish and Scale GCCs with G&S Consulting
Setting up a successful capability center requires specialized expertise in talent acquisition, operations, and technology. G&S Consulting has over 16 years of experience helping enterprises hire tech talent across India:
- Expert-Led Talent Acquisition & Workforce Planning: G&S Consulting specializes in identifying the right tech talent across domains, tech stacks, and industries. With a deep focus on GCC-centric hiring, G&S serves key clients such as WESCO, First American (India), Marelli, Carrier, GlobalLogic (Hitachi’s Digital Centre), and NAVEX. The firm ensures industry-leading hiring efficiency, onboarding 70% of hires within 30 days and maintaining a 65% offer-to-join ratio.
- End-to-End GCC Setup Support: From location analysis and regulatory compliance to office space selection and operational strategy, our team guides enterprises through every step of the process.
- Process Optimization & Technology Enablement: Leveraging data-driven decision-making, automated ATS, and TA-specific metrics, we ensure that GCCs operate efficiently with best-in-class practices.
Ensure seamless integration of your GCC with expert guidance on compliance, talent acquisition, and process optimization.
India has solidified its position as a global powerhouse in GCC development, blending cost efficiency and a highly skilled workforce to deliver exceptional value. Establishing a capability center in India will enable MNCs to reap benefits beyond just cost reduction by setting up a network to support their global operations and market expansion.
As business needs shift, enterprises must continuously innovate and optimize their GCC strategies to maintain their position and maximize ROI. Partner with G&S Consulting to establish scalable GCC operations today.