Multinational giants get wider choice as GCC boom spreads in India: Report
New Delhi, Aug 4
The Global Capability Centres' boom in India has triggered a fierce competition among the states for a share in what is forecast to be a $150 billion sector by 2030. This is also offering Western multinational giants a wider choice that now goes beyond Bengaluru which was until now the main focus of the IT industry, according to an article in One World Outlook.
The article points out that GCCs are no longer the outsourced back offices of Western companies where a bank sent its data entry or a software firm sent its support tickets. "They are, increasingly, where global companies actually build things: risk models for international banks, chip design for semiconductor firms, AI platforms for consumer tech giants, and the software that runs supply chains from Ohio to Rotterdam," it observes.
The GCCs are an entirely new layer of the Indian economy taking shape inside a five-year window. The Finance Ministry has pointed to GCCs currently contributing somewhere in the range of $65-70 billion in gross value addition to the economy - a figure that could roughly double, to between $100 billion and $150 billion, by the end of the decade.
The article states that GCCs have become the operational spine of a large share of global business. They run compliance for international banks, monitor cybersecurity for multinational insurers, engineer cloud infrastructure for retailers, and increasingly own genuine product and R&D mandates rather than just executing someone else's blueprint.
When Western firms decide where to place a new AI centre of excellence, or where to consolidate a risk function, they are not choosing between "onshore" and "offshore" anymore. They are choosing between an increasingly differentiated menu of Indian states, each offering a distinct combination of subsidy, talent pipeline, regulatory ease, and specialization.
It highlights that global companies now have a varied choice among states to choose from depending on the specialisation required.
"A bank looking to build out fintech and risk capabilities has a genuinely different calculus in Gujarat, with its GIFT City tax advantages and financial-sector focus, than it does in Karnataka, where the depth is in engineering and product design, or in Telangana, where pharma and BFSI talent pools overlap in ways few other states can match. A firm chasing pure cost efficiency for high-volume, moderate-complexity work might find Uttar Pradesh's tier-II cities or Bihar's emerging incentive regime more compelling than anything Bengaluru can now offer, simply because the latter's costs have risen with two decades of success. This is, in effect, India offering multinationals a portfolio rather than a single destination - and portfolios are usually more resilient than single bets," the article states.
— IANS
Reader Comments
This is great news but I hope the state governments actually invest in infrastructure and education to support this growth. It's not just about giving tax breaks to MNCs - we need skilled talent pipelines, reliable power, and good roads. Otherwise, these GCCs will just be empty buildings with a signboard. 🤔
As someone who works in a GCC in Hyderabad, I can confirm this is totally true. We're not just doing back-office work anymore. My team literally builds risk models for a global bank - it's real, high-end work. The $150 billion prediction feels very achievable. So proud of what India is becoming! 💪
Main point being missed here: Bengaluru's loss is these other states' gain. But what about the employees? If companies move to tier-2 cities, salaries will likely drop too. I've seen offers from GCCs in smaller cities - they pay 30-40% less than Bangalore. Is this really progress or just a race to the bottom for wages? 🤨
I've been involved in setting up two GCCs in India for my company, and this report is spot on. We chose Chennai and Pune over Bangalore for our latest one because the talent pool is equally good but the cost structure is far more predictable. India truly offers a portfolio of options now - it's a smart strategy.
The mention of Bihar's emerging incentive regime caught my eye. It's about time states like Bihar and UP get a slice of this pie. But let's be honest - the ground reality is tough.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.