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India is currently home to more than 1,700 GCCs, accounting for roughly 17 per cent of such centres worldwide. | Representational
Foreign firms are not the only ones setting up Global Capability Centres (GCCs) in India to provide centralised support for their businesses. Large Indian corporations are also creating such facilities, often to enhance their technological capabilities.
In the last four years, Indian entities such as Reliance Industries, the Adani Group, Dr Reddy’s Laboratories (DRL), and Bank of Baroda have established GCCs locally.
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According to Arindam Sen, GCC leader and partner in the media, entertainment, and telecommunications practice at EY India, Indian firms have set up approximately 50 GCCs in sectors like telecoms, financial services, and automotive over the past few years. Talking to The Economic Times, Sen noted, “Companies are expanding in terms of size and scope, and the sectors they operate in are pushing them to think along these lines; otherwise, they risk duplicating resources.”
He further said that these firms are adopting a streamlined and leaner model across various sectors and geographies, mirroring multinational practices. “That’s the primary driver,” said Sen.
Centralised tech strategy on the rise
Experts highlight that legacy companies are recognising the need for a strong, centralised tech strategy as rapid technological advancements continue to transform industries. Although some companies may not formally designate these units as GCCs, referring to them instead as technology centres, innovation labs, or centres of excellence, the purpose they serve is largely aligned with GCC objectives.
Several Indian companies are choosing to establish these centralised facilities in smaller cities, such as Gujarat’s GIFT City, due to lower operational costs, access to talent, and reduced attrition rates.
Earlier, on September 24, Adani Enterprises, one of the country’s largest conglomerates, incorporated a wholly owned subsidiary, Adani GCC Pvt Ltd, in Ahmedabad. This new entity will provide business transformation services and back-office support, including finance, accounts, human resources, IT, and ITeS, to Adani group companies.
In June, pharmaceutical giant Dr Reddy’s opened a 70,000 sq ft biologics facility at Genome Valley in Hyderabad, which serves its group company, Aurigene Pharmaceutical Services. In August, Reliance Industries also announced its plans to expand its R&D efforts within India, focusing on innovation.
Meanwhile, public sector lender Bank of Baroda has launched its wholly owned subsidiary, Baroda Sun Technologies, to lead the bank’s digital transformation and act as a catalyst for innovation in new-age technologies.
Although these facilities may not be as large as traditional IT firms, Sen added that these companies have the potential to significantly increase their headcount and operate more efficiently. “Investments are already flowing in,” he remarked.
ANSR, a company specialising in setting up GCCs, has been engaged by around 10 Indian firms to help establish their centres.
Growth of GCCs in India
Indian cities such as Coimbatore and Ahmedabad are becoming attractive for companies looking to set up GCCs, thanks to state government incentives, the presence of established educational institutions, skilled workforce, and lower operational costs compared to metropolitan areas.
India is currently home to more than 1,700 GCCs, accounting for roughly 17 per cent of such centres worldwide. These facilities employ around 1.9 million people. Bengaluru remains the country’s top GCC hub, hosting 36 per cent of the GCC workforce in the first two quarters of FY25, according to a report by TeamLease Digital, a leading firm in tech staffing and learning solutions. However, there has been a noticeable shift, with 22 per cent of new GCCs established in Tier-II cities during the first half of 2023, as reported by real estate consultancy CBRE.
The number of GCCs in India is expected to rise to between 2,100 and 2,200 by 2030, with a workforce of 2.5 to 2.8 million, according to a Nasscom-Zinnov India GCC landscape report released in September. Their contribution to Indian IT industry revenue is projected to reach $99-105 billion, up from $64.6 billion last year.
First Published: Oct 16 2024 | 1:25 PM IST
