India’s robust economy and favourable business environment are propelling the expansion of Global Capability Centers (GCCs) markets, defying global economic headwinds. As GCCs evolve into epicenters of innovation and digital transformation, their strategic importance in the value chain continues to grow.
Market Growth and Opportunities
With these advantages, India offers multinational corporations an unbeatable environment to establish and grow emerging GCC markets, driving success and competitiveness in today’s global economy. India has over 1,600 Global Capability Centers (GCCs) that employ 1.5 million experts. The GCC market in India is expected to grow to $110 billion by 2030, driven by the increasing demand for digital transformation, innovation, and talent.
Cities Leading as markets of GCCs in India
India’s leading cities – Bengaluru, Hyderabad, Delhi NCR, Mumbai, Pune, and Chennai – have been leading as magnets for Global Capability Centers (GCCs), offering a potent combination of robust infrastructure, access to top talent, and a supportive business ecosystem.
Evolving GCC Markets in India
In addition to the established GCC hubs, several emerging markets are gaining traction in India. These include:
– Coimbatore: Often Called as the “Manchester of South India” originally known for its textile and manufacturing industries, Coimbatore is emerging as a hub for GCCs in the manufacturing and logistics sectors. For example, Flex Ltd (previously known as Flextronics) has created over 1,000 jobs in the region. Another example is Colruyt Group which inaugurated its second IT Global Capability Centre in Coimbatore, aiming to enhance digital enablement and transformation.
– Thiruvananthapuram: The capital city of Kerala is attracting GCCs in the IT and ITES sectors, driven by its skilled workforce and favourable business environment. For instance, the Thiruvananthapuram-based GCC of a leading European IT company UST Global has invested over ₹100 crores in the region. Technopark is home to the Oracle India Pvt Ltd GCC rendering software development and support services.
– Vizag: Visakhapatnam, also known as Vizag, is emerging as a hub for GCCs in the fintech and IT sectors driven by its strategic location and access to talent. For example, the Vizag-based GCC a leading US-based fintech company Cooperation Council has created over 500 jobs in the region. The city is also home to leading IT Services MNCs Such as Tech Mahindra, Wipro which provides IT services and solutions.
– Jaipur: The Pink City is attracting GCCs in the IT, ITES, and manufacturing sectors, driven by its favourable business environment and access to talent. For instance, Metlife a US Based Insurance Giant hosts over 900+ Employees at its Jaipur office known as Global Operations Support Center (GOSC) and is actively attracting multinational corporations due to its skilled talent pool, cost advantages, and supportive infrastructure.
India has solidified its position as the world’s premier destination for Global Capability Centers (GCCs), hosting over 50% of the global GCC market. This trend is expected to continue, with India remaining the preferred location for setting up offshore business and innovation centers.
Growth Projections and Initiatives for Emerging GCC Markets
According to a report by global consultancy EY, India’s GCC market is poised for significant growth, projected to reach US$110 billion by 2030, representing a 139% increase from the US$46 billion market size in 2023.
India’s unique combination of advantages, including government backing, skilled workforce, and world-class infrastructure, has made it an attractive destination for Global Capability Centers (GCCs). With its leading cities offering a potent combination of infrastructure, talent, and business ecosystems, India is poised to continue its growth as a premier GCC hub.
Government Initiatives for Emerging GCC Markets
As India’s GCCs continue to flourish, the government is shifting its focus towards tier 2 and 3 cities, aiming to foster inclusive growth and democratize access to opportunities. To achieve this, specialized incentives and bespoke office spaces are being developed to attract investments and diversify India’s GCC ecosystem beyond traditional metropolitan hubs. The government policies seek to boost GCC expansion into Tier-II and III cities by providing a comprehensive package of tax incentives, streamlined regulations, and tailored support for specialized centers, thereby unlocking the potential of India’s smaller cities.
To thrive in this dynamic landscape, GCCs must adeptly navigate four pivotal challenges:
- Embracing technological revolution: Staying ahead of the curve in AI, automation, and other breakthrough technologies demands a culture of continuous innovation and upskilling.
- Regulatory expertise: Mastering India’s intricate regulatory framework requires a nuanced understanding of local laws, compliance, and governance.
- Cultural synergy: Fostering cohesion and engagement within a diverse workforce spread across multiple cities necessitates thoughtful leadership and strategic HR initiatives.
- Infrastructure optimization: Investing in state-of-the-art facilities and digital infrastructure is crucial to drive productivity, efficiency, and competitiveness.
The Ministry of Electronics and Information Technology is formulating a novel policy to catalyze the growth of GCC markets in India’s Tier-II and Tier-III cities, according to a report by The Economic Times. Building on existing state-level incentives, the policy seeks to create a conducive ecosystem for GCCs in non-metro regions by offering a suite of additional benefits, thereby bridging the gap between urban and rural India.
India’s GCC market is experiencing a paradigm shift, driven by sector-specific trends that leverage emerging technologies and innovation. Key trends include accelerated adoption of AI, blockchain, and IoT in IT; rising demand for fintech and compliance in BFSI; growing emphasis on healthcare IT and research; and increasing adoption of Industry 4.0 solutions in manufacturing. These trends underscore the evolving needs of businesses, highlighting innovation and technology as critical drivers of growth and competitiveness.
Microsoft’s India Development Center (IDC) in Hyderabad exemplifies the transformative impact of Global Capability Centers (GCCs) in India. By tapping into India’s vast engineering talent pool, IDC drives innovation and technological advancement, developing critical products like Azure, Office 365, and Dynamics 365. This not only contributes significantly to Microsoft’s global operations but also redefines the role of GCCs in India – from mere back-office support to vibrant hubs for product innovation, cutting-edge technology development, and research excellence.
GCCs are adopting technologies like robotics, digitalization, and self-service solutions to increase efficiency and reduce costs. They are shifting from just providing support to creating value, driving innovation, and attracting top talent. The goal is to move from being cost centers to revenue generators, focusing on creating new profit streams.
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