India is experiencing a remarkable surge in the expansion of Global Capability Centers (GCCs), attracting both Fortune 500 companies and smaller, mid-sized firms eager to capitalize on the country’s talent pool and cost advantages. Over the past eight months, India has welcomed several new mid-sized GCCs with workforces of 1,000 to 2,000 employees, a trend that follows larger multinational firms that have already established operations with staff sizes of 10,000 to 15,000 employees.
The growth of GCCs in India is transforming the nation into a global hub for sophisticated functions such as data analysis, customer support, and research and development (R&D). According to a report by The Economic Times, this expansion showcases India’s evolving role as a strategic location for global businesses seeking efficiency and innovation.
Notable New Entrants in India’s GCC Sector
The recent wave of mid-sized companies establishing their GCC operations in India highlights the country’s increasing appeal to a wider range of industries. Notable companies that have joined this boom include:
• Flutter Entertainment
• Hy-Vee Inc.
• ChampionX
• Neighborly
• Blackbox
• Okta
• Indus Pharma
These companies, representing diverse sectors such as technology, entertainment, and pharmaceuticals, are leveraging India’s skilled workforce and cost-effective business environment to scale their operations and drive innovation.
Increased Demand for Office Space
As GCCs continue to proliferate in India, the demand for office space has surged, particularly in technology-centric cities like Bengaluru and Hyderabad. These two cities alone account for 60% of all GCC leasing activity since 2021, reinforcing their status as leading technology hubs. Data from Colliers indicates that technology-focused GCCs have been responsible for 40% of the total leasing activity, with these centers occupying over 56 million square feet of office space in recent years.
Beyond the technology sector, GCCs are gaining prominence in industries such as banking, financial services, insurance (BFSI), engineering, and manufacturing. This diverse range of industries is driving demand for modern office infrastructure, further bolstering India’s real estate sector.
The Evolution of GCCs in India
The evolution of GCCs in India has been significant. Initially, in the late 1990s and early 2000s, the first wave of GCCs was primarily driven by large banks and technology firms, including industry giants like General Electric, Intel, and Citibank. These early GCCs were largely focused on transactional processes and basic back-office functions.
Today, however, GCCs have transformed into multifunctional hubs that handle complex, high-value tasks from the outset. Gaurav Gupta, Partner and GCC Industry Leader at Deloitte India, notes that smaller GCCs are now adopting lessons from established centers, enabling them to tackle more advanced functions such as R&D and customer insights. This shift underscores the role of innovation and technology in shaping India’s GCC landscape.
Why India?
India’s appeal as a destination for GCCs lies in several key factors:
• Cost Advantage: India offers a more affordable business environment compared to other global markets, allowing companies to maintain profitability while scaling operations.
• Skilled Workforce: With a young, highly educated workforce, India provides GCCs with access to a vast pool of talent, particularly in technology and engineering fields.
• Stable Business Climate: India’s political and economic stability makes it an attractive location for long-term investments by global firms.
• Innovation Opportunities: The country’s focus on technology and data-driven solutions makes it an ideal setting for companies looking to drive innovation and enhance operational efficiency.
A Bright Future for India’s GCC Sector
The future looks promising for India’s GCC industry as more small and medium-sized companies explore the benefits of setting up operations in the country. With advancements in technology, increasing competition, and a growing demand for innovative business solutions, India will likely continue to attract GCC investments from around the globe. This expansion not only contributes to India’s economic growth but also solidifies the country’s position as a critical player in the global business landscape.