&w=1024&resize=1024,0&ssl=1 "Not only foreign companies but also Indian corporates have jumped on the GCC news bandwagon")
It is not just foreign companies that are setting up Global Capability Centers (GCCs) in India to provide centralized support to their businesses. Large Indian corporations also often build such facilities to enhance their technological capabilities.
Over the last four years, Indian companies such as Reliance Industries, Adani Group, Dr. Reddy's Laboratories (DRL) and Bank of Baroda, have set up GCC locally.
Click here to connect with us on WhatsApp
According to Arindam Sen, GCC leader and partner in the media, entertainment and telecommunications practice at EY India, Indian companies have created around 50 GCCs in the last few years across the telecom, financial and automotive sectors. Speaking to The Economic Times, Sen noted: “Companies are expanding in size and scope, and the sectors in which they operate are leading them to think this way; Otherwise, they risk duplicating assets.”
He also said that these companies are adopting a streamlined and lean model across sectors and geographies, reflecting international practices. “That is the main driver,” Sen said.
Centralized technology strategies are becoming increasingly popular
Experts emphasize that legacy organizations recognize the need for a strong, focused technology strategy as rapid technological advances continue to transform industries. While some companies may not formally designate these units as GCCs, instead calling them technology hubs, innovation labs, or centers of excellence, the purpose they serve is largely consistent with those of the GCC.
Many Indian companies choose to set up such centralized facilities in smaller cities, such as Gift City in Gujarat, due to lower operational costs, access to talent and reduced rates.
Earlier on September 24, Adani Enterprises, one of the largest conglomerates in the country, had established a wholly owned subsidiary in Ahmedabad, Adani GCC Pvt Ltd. The new entity will provide business transformation services and back-office support covering finance, accounting, HR, IT and ITES for Adani Group companies.
In June, pharmaceutical giant Dr. Reddy's has set up a 70,000-square-foot biologics manufacturing facility in Genome Valley, Hyderabad, to serve its Origin Pharmaceutical Services group company. In August, Reliance Industries also announced plans to expand its R&D efforts in 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.
While these benefits may not be as great as traditional IT companies, Sen adds that these companies have the potential to significantly increase employment and operate more efficiently. “Investments are already flowing,” he commented.
ANSR, a company specializing in GCC implementations, has engaged around 10 Indian companies to help set up their centers.
GCC development in India
Indian cities such as Coimbatore and Ahmedabad are becoming attractive for companies looking to set up a GCC due to state government incentives, presence of recognized educational institutions, presence of skilled labor and lower operating costs compared to metropolitan areas.
There are currently over 1,700 GCC centers in India, which is approximately 17 percent of such centers globally. These plants employ approximately 1.9 million people. Bengaluru remains the country's top GCC hub, with 36 percent of the GCC workforce working in the first two quarters of FY25, according to a report by Teamlease Digital, a leading staffing technology and learning solutions company. However, according to a report by the consulting company CBRE, there was a noticeable change in the first half of 2023 – 22%. new GCCs were established in Tier II cities.
According to Nasscom-Zinnov India's GCC landscape report released in September, the number of GCCs in India is expected to grow from 2,100 to 2,200 by 2030, with employment ranging from 2.5 to 2.8 million. Their contribution to Indian IT industry revenues is estimated to be $99-105 billion, up from $64.6 billion last year.
