GCC Market Size In India To Exceed US$100 bn By 2030: Why India Is A Preferred Destination

• India is home to over 1,300 Global Capability Centres (GCCs), employing over 1.3 million people.
• GCCs are offshore entities of multinational corporations that provide support services like finance, human resources, and IT to their parent organizations.
• More MNCs are looking at India to establish their Global Capability Centres.

The emergence of GCCs in India

Global Capability Centres (GCCs) are offshore entities of multinational corporations that operate worldwide.

These centers provide support services like finance, human resources, IT, and analytics to their parent organizations.

In recent years, India has established itself as a leading hub for innovation and research. This reputation has attracted more global companies to tap into India’s potential for their business growth.

The country is home to a significant share of global GCCs, with over 1,300 organizations employing over 1.3 million people.

These GCCs, representing international companies in India, are in various sectors, including technology, engineering, and consulting.

Most operational GCCs in India are from US-based firms, followed by European firms accounting for 35%.

They have played a significant role in India’s economic development by creating quality employment opportunities and contributing to its GDP.

In FY 2020, the sector generated an annual revenue of US$33.8 billion, according to a report from NASSCOM.

By 2030, India’s GCC market is projected to exceed US$100 billion. 2,500 GCCs are predicted to employ over 4.5 million people across the country, according to a report by EY.

Why India became a prime destination for Global Compatibility Centers

Despite facing global economic challenges such as tightening monetary policies and rising inflation, India is experiencing benefits.

Factors such as political stability and a robust regulatory system for the financial sector encourage the establishment of GCCs in India.

Here are the primary reasons why multinational corporations (MNCs) are choosing to establish their Global Capability Centres (GCCs) in India:

A large pool of highly skilled talent:  

• India’s Global Capability Centres (GCCs) have flourished due to the country’s abundant and proficient workforce.
• India produces many graduates annually, particularly in engineering, computer science, business management, and finance.
• As a result, global companies operating in India can tap into this talent pool to deliver diverse services to their clients worldwide.

Cost-effectiveness:

• The operating expenses of setting up one of these centers in India are substantially lower than in developed countries like the US and the UK.
• This cost advantage arises from lower salaries, reduced real estate costs, and favorable exchange rates.
• By establishing a GCC in India, global companies can achieve significant cost savings.

Digital Transformation:

• Digital transformation has played a pivotal role in establishing GCCs in India.
• The rapid technological advancements and the increasing reliance on digital solutions have created a strong demand for skilled professionals in MNCs.
• By setting up GCCs in India, these companies can tap into the country’s thriving digital ecosystem and leverage the capabilities of local talent to accelerate their digital transformation journeys.

Governmental Support:

• The Indian government has actively supported the establishment of global capability centers, offering incentives and initiatives to attract foreign investment.
• Special economic zones (SEZs) have been created where companies can establish their GCCs and avail themselves of tax incentives and other advantages.
• The government’s focus on promoting innovation and research and development has further facilitated the development of GCCs in India.

Some prominent GCCs in India

• Amex
• 3M
• Coinbase
• Citibank
• Goldman Sachs
• Airbnb
• HSBC
• KPMG
• McKinsey
• Accenture

Closing…

These global capability centers (GCCs) have evolved from mere back-end entities to versatile and strategic partners.

It is now taking on intricate responsibilities throughout the organization’s value chain.

The COVID-19 pandemic has further increased India’s attractiveness as a preferred destination for GCCs due to the country’s adaptability during challenging times.