Global Capability Centres (GCCs) are specialized units or hubs set up by companies to leverage talent, expertise, and resources from various locations around the world. These centres are often established in regions with favourable business environments, such as lower operational costs and access to skilled labor.
Initially set up to save costs and help organisations with their business functions GCCs have significantly made their presence felt in India. Today, the country is home to over 1,800 such centres established by top multinational corporations, to serve the global and regional market with more efficiency.
GCC in India – Quick facts!:
- 240 mn sft Grade A stock occupied by GCCs in the top 7 cities
- 35.2 mn sq ft of leasing by GCCs in last 18 months (2023-H1 2024)
- ~60% share of Americas – headquartered firms in area occupied by GCCs
- 3/4th share of Bengaluru, Hyderabad and Chennai in space leased by GCCs in last 18 months (2023-H1 2024)
- ~50% share of GCCs in active, ongoing space requirements across the top seven cities
- ~78% combined share of Manufacturing, IT/ITES & BFSI
- 100+ GCCs entered India in last two years
- ~42% share of Bengaluru in space occupied by GCCs
What is driving GCC growth in India?
Talent Pool: India has the largest youth population in the world and is also one of the top STEM graduate-producing countries, giving companies access to a large talent pool across the nation.
Cost Efficiency: Help companies reduce operational costs by outsourcing certain functions to with lower labor costs. India has ~$2,700 per capita GDP compared to $80,000+, $55,000+ and $12500+ in US, Europe and China respectively – huge cost arbitrage!
Technology and R&D: The integration of artificial intelligence (AI), machine learning (ML), big data analytics, cloud computing, and the Internet of Things (IoT) has transformed GCCs into innovation hubs.
Culture of Innovation: GCCs in India are not merely execution centers but are increasingly becoming innovation engines for their parent companies. They are involved in developing new products, services, and business models that drive competitive advantage. The emphasis on innovation is evident in the numerous patents and intellectual property (IP) generated by these centres.
Tech Startup Ecosystem: According to NASSCOM, India is home to over 9,300 tech startups, making it the third-largest startup ecosystem globally. This ecosystem provides GCCs with access to cutting-edge technologies, entrepreneurial talent, and new business models, enhancing their innovation capabilities.
Vast and Improving Infrastructure: The country has space and the potential to expand. Easy access through roads, airports, electricity and reliable internet connectivity in major cities and other facilities are of great help.
Supportive Government Policies: Policy initiatives like SEZ, STP – offering tax initiatives with world class infrastructure; Digital India, Make in India and Skill India have further supported the growth of GCCs.
India currently hosts around 1,600 Global Capability Centres (GCCs), with this number expected to rise to 1,900 by next year. A Nasscom-KPMG report highlights that the market size for GCCs has reached $60 billion, up from $100 billion in 2014-15 and more than 60 billion in 2022-23, reflecting an 11.4% compound annual growth rate (CAGR). Between 2018-19 and 2023-24, GCCs created over 600,000 new jobs, bringing the total to more than 1.6 million.
The sector’s prospects look even brighter. According to the latest Economic Survey, GCCs are projected to generate $121 billion in revenue by 2030, approximately 3.5% of India’s current GDP, with $102 billion expected to come from exports.
The trend of establishing GCCs in India is expected to continue, with a greater focus on innovation, digital transformation, and integration into global operations. As businesses adapt to changing market dynamics, GCCs will likely play an increasingly strategic role in global business frameworks.
Source: JLL Research 2024
