Global Capability Centres (GCCs) have come a long way to become pivotal components in the strategic operations of multinational corporations (MNCs), serving as hubs for innovation, efficiency, and talent acquisition. And what is the outcome? High strategic and measurable value for their parent companies.
India has been a preferred destination for these centres for more than two decades. Primary factors being robust talent pool, cost arbitrage, 24x7 operations and a conducive business environment. In 2024, how India continues to be a catalyst for driving digital transformation and the growth engine your business needs by offering outstanding service opportunities and much more.
In this blog, our team of business growth consultants delve into the evolution of GCCs in India, their impact on employment, and the advantages they offer to foreign companies considering establishing such centres in the country. An insightful overview of GCCs in India which will help you in making better business decisions.
Evolution of GCCs in India
Initially, GCCs in India functioned primarily as back-office support units for global enterprises, handling routine tasks and administrative functions. Over time, these centres have transformed into integral parts of their parent organizations, contributing significantly to core business operations, research and development, and strategic initiatives. This evolution underscores India's growing prominence in the global business landscape.
As of August 2024, India hosts approximately 1,600 GCCs, with projections indicating an increase to 1,900 by the following year. The market size of these centres has expanded from $19.6 billion in 2014-15 to $60 billion, reflecting an annual growth rate of 11.4%. This substantial growth highlights the escalating role of GCCs in India's economic framework.
Impact on Employment
The proliferation of GCCs has had a profound impact on employment in India. Between 2018-19 and 2023-24, these centres created over 600,000 new jobs, bringing the total employment in the sector to more than 1.6 million. This surge in employment opportunities has been instrumental in addressing the country's workforce demands and enhancing the skill sets of Indian professionals.
A report by Genius Consultants revealed that 78% of professionals expect the GCC sector to become a catalyst for creating jobs, particularly benefiting the gig and temporary workforce in India. This optimism reflects the potential of GCCs to diversify and expand employment avenues in the evolving job market.
Advantages for Foreign Companies Establishing GCCs in India
- Access to a Skilled Talent Pool
India boasts a vast and diverse talent pool, particularly in the fields of information technology, engineering, and finance. Establishing a GCC in India provides companies with access to highly skilled professionals capable of driving innovation and efficiency.
- Cost Efficiency
The cost of operations in India is relatively lower compared to many Western countries. This cost advantage enables companies to optimize their operational expenses while maintaining high-quality standards.
- Strategic Location
India's geographical location offers strategic advantages for companies looking to serve markets in Asia, Europe, and the Middle East. The country's time zone overlaps with several regions, facilitating seamless business operations across different geographies.
- Supportive Government Policies
The Indian government has implemented several initiatives to attract foreign investment, including the establishment of Special Economic Zones (SEZs), tax incentives, and simplified regulatory frameworks. These measures create a conducive environment for setting up and operating GCCs.
- Robust Infrastructure
India has made significant investments in developing its infrastructure, including state-of-the-art office spaces, reliable telecommunications networks, and efficient transportation systems. These developments support the smooth functioning of GCCs.
Leading Companies with Successful GCCs in India
- Microsoft's India Development Center (IDC) in Hyderabad is one of its largest R&D centres outside the United States. The IDC focuses on developing products and services for global markets, leveraging India's engineering talent.
- Recently, Google's acquired significant office space in Bengaluru which will play a crucial role in product development, research, and support functions. The centre contributes to various global projects, including advancements in artificial intelligence and machine learning.
- JPMorgan, the financial giant plans to increase its headcount in India by 5%-7% annually over the next few years to support international operations, focusing on one of the hottest global markets for talent. The bank currently employs approximately 55,000 people in India, representing about a fifth of its global workforce.
Future Outlook
The future of GCCs in India appears promising. Projections indicate that the number of GCCs could rise to over 2,100 by 2030, employing between 2.5 to 2.8 million people. The market size is expected to grow to $99 billion-$105 billion by 2030, up from $64.6 billion in fiscal 2024.This growth trajectory underscores the increasing confidence of global corporations in India's capabilities and the strategic importance of GCCs in their global operations.
Global Capability Centres have become integral to India's employment landscape, driving job creation, skill development, and economic growth. For foreign companies, establishing GCCs in India offers numerous advantages, including access to a skilled workforce, cost efficiencies, and a supportive business environment. As India continues to strengthen its position as a global hub for these centres, companies looking to expand their global operations should consider the strategic benefits of setting up GCCs in the country.
If you are a multinational corporation looking to establish GCC in India, and want a local partner to deliver business solutions, contact experts at Narayan Bhargava Group. We are one of the leading business consulting services provider in India. Our team will help you with:
- Strategic Roadmap
- Talent Supply
- HR, Payroll, Back Office, Contact Centre Support
- Meet Compliance Needs
- Office Space Solutions
- Advanced Technology Solutions
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