 "GCC, Global capability center")
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Early this month, British-Swedish pharmaceutical major AstraZeneca announced the expansion of its global capability centre (GCC) in Chennai, making it the company’s biggest such centre in the world. This is not an isolated case; Tamil Nadu is becoming the latest hotspot for GCCs in India, with over 50,000 jobs created by more than 40 global companies in the last three years, giving tough competition to its rivals in recent times.
Not just AstraZeneca, but Pfizer and Roche have also set up their centres in the state. On the other hand, the World Bank Group (largest outside headquarters), Standard Chartered, Hitachi Energy, Renault Nissan, Caterpillar, Nokia, and Ford, among others, have their largest centres in the world in Chennai. The global majors that invested in the state after 2021 include Adidas, Mizuho, UPS, Harman, Hitachi Energy, Deloitte USI, AT&T, and ZoomInfo, among others.
“Tamil Nadu has become a preferred destination for global and reputed pharma companies like Pfizer, Roche, and AstraZeneca to set up their Global Capability Centres (GCCs) and innovation centres. This achievement is a testament to our government’s targeted efforts to attract high-quality jobs to the state,” said Tamil Nadu Industries Minister T R B Rajaa. The rise in GCCs and technology activity was visible in Chennai’s office space absorption and supply numbers too. Chennai recorded its highest-ever leasing and decadal high supply with a total absorption of 10.0 million square feet, up from 6.2 million square feet in 2022 and 3.7 million square feet in 2021, and supply stood at 6.4 million square feet in 2023. The boom in the Chennai market in the last three years is giving tough competition to cities like Bengaluru, which contributes 30 per cent of GCC units in India, Mumbai 13 per cent, Pune 12 per cent, and Hyderabad 12 per cent. Logistics and engineering R&D have seen the majority of investments in Chennai in recent times.
What’s driving the growth?
“Compared to cities like Bengaluru, NCR, and Mumbai, the cost of operations is much less in Tamil Nadu. In addition to this, we have an added advantage in terms of the availability of talent too, with a lower attrition rate,” said V Vishnu, managing director and chief executive officer of Guidance Tamil Nadu, a handholding agency for investors. Interestingly, as per the Cushman & Wakefield report, Coimbatore is ranked as the top Tier 2 city for GCCs based on factors like the availability of engineering graduates, ease of living, ease of doing business, and good governance.
“Recently, we focused on logistics GCCs and were hugely successful. We have seen a good number of logistics majors set up their GCCs in Chennai. We are now witnessing a significant influx of pharma GCCs choosing Chennai, further solidifying our reputation as a premier investment destination. Our overarching goal is to transform Tamil Nadu, the Knowledge Capital of India, into the Talent Capital of the World,” Rajaa added.
In order to support the growth of high-end product development and research and development in the state, the government launched the R&D policy in June 2022. The policy supports the sector through subsidies on office space lease rental or land cost and plant and machinery up to Rs 25 crore, and a training subsidy of up to Rs 1.2 lakh per employee for every incremental hire, among others. The recent state budget also lined up a payroll subsidy for new GCCs offering high-value employment in the state.
The minister also highlighted the pool of skilled professionals expanding both in scale and quality as the reason for the boom in GCCs. “Through initiatives like the Naan Mudhalvan scheme, our students are equipping themselves with cutting-edge skills in emerging sectors, ensuring they are future-ready. Now that we have upskilled them, the obvious next step is to enable an ecosystem where they can secure high-quality jobs close to home. Hence, we are deeply committed to creating opportunities that match their talents by engaging directly with leaders in various industries and encouraging them to bring their high-quality jobs to Tamil Nadu,” Rajaa added.
First Published: Jul 14 2024 | 3:01 PM IST
