India’s Global Capability Centres (GCCs) have experienced significant growth over the last two decades, evolving from simple back-office units to strategic operations for multinational companies. Originally, companies like Tesco established these centers mainly for IT and finance tasks, but their current roles encompass complex functions, including data analytics and vendor due diligence. Tesco now operates its store design processes in India, highlighting this shift.
Currently, over 1,700 multinationals, including tech giants and financial institutions, have set up GCCs in India. This expansion has increased employment to about two million individuals, generating approximately $65 billion in annual revenue. While the growth trajectory seems promising, challenges such as global trade protectionism could affect this trend.
Industry experts note that GCCs provide both “labour arbitrage” and “intellectual arbitrage,” with a focus on the pool of skilled talent rather than just cost reductions. The demand for GCCs is particularly high in places like Bengaluru, which has become attractive for its concentration of skilled workers in technology and design.
The sector’s future appears bright, with estimates suggesting a market value of over $100 billion by 2030, driven by a growing number of educated professionals capable of fulfilling various roles. However, expanding GCCs into tier-II cities is also becoming common, as companies seek cheaper talent and real estate.
Despite these advancements, the rapid growth of GCCs has outpaced infrastructure development, leading to concerns about essential services like water supply in some areas. Furthermore, geopolitical factors, including potential tariffs on outsourcing, pose threats to this burgeoning industry. As these centers reshape the narrative around corporate control of operations, the potential for re-domiciling headquarters to India could emerge, presenting both opportunities and challenges for the future.
Source: https://www.bbc.com/news/articles/c1wgqjd02n1o?at_medium=RSS&at_campaign=rss