India is seeking to expand the footprint for Global Capability Centres (GCC) as the government seeks a put in place a national framework that can address several industry-related issues to help it scale up.
According to a report in The Economic Times, an industry-led committee has been set up by the government that will work over the next year. The committee includes members from investment promotion agency Invest India, industry body nasscom, consulting and advisory firms KPMG, Zinnov, and ANSR.
The committee is expected to suggest ways to enhance the availability of talent and infrastructure, reform for building bylaws, and ways of collaboration. During her budget speech in February 2025, Finance Minister Nirmala Sitharaman had committed to developing a framework “as guidance to states for promoting Global Capability Centres in emerging tier 2 cities.”
Small Cities, Big Opportunities
India is home to over 1700 GCCs, with nearly 500 being added over the last five years. During this period, the revenues for the industry have hit $64.6 billion in FY2024- 25 (ending March 2025) against $40 billion five years ago. The sector has registered a 10 percent CAGR and now employs 1.9 million people. Bengaluru, Hyderabad, Pune, Delhi NCR, and Chennai are the prominent hubs for these centres. While the select centres are bustling with their presence, steep growth in the sector has been enabled due to their spread to tier two and three cities.
India’s federal government wants to fuel this growth further, encouraging global companies to set up their innovation centres at the emerging hubs.
Beyond the traditional GCC centres, state governments have been rolling out the red carpet for companies to set up GCCs in their states. Madhya Pradesh recently announced a policy, while Andhra Pradesh announced a five-year policy last year. Gujarat, India’s manufacturing and economic hub, has also announced a policy.
Creating Global Opportunities
Several emerging hotspots around the world have been preferred among MNCs to set up their GCCs. In Europe, the availability of a skilled workforce is cited as Poland’s advantage, while the role of technology companies is driving the GCCs in the UK and Germany, in close partnership with industry. Mexico, Brazil, Argentina, Costa Rica, Chile, and other LATAM countries also offer a cost advantage and availability of talent that is attracting large companies to their shores.
Philippines, Vietnam, Malaysia, and other APAC nations also have the supporting ecosystem and talent that is driving the industry to their countries.
In a study to identify the scalable software engineering teams across countries, carried out by Zinnov in 2023, India emerged at the top. China was the nearest competitor to India, with Canada in between in the second spot. The Philippines was in seventh place. Since then, several states in India have announced their policies to encourage GCCs.
India is looking to tap this innovation opportunity. As the next wave of change could come from the innovation that happens from these centres, as their parent companies look for growth beyond the cost arbitrage. According to industry experts, innovation driven from the tier two and three cities has the potential to be scaled up across nations and continents.
“GCCs drive emerging technologies and have become the catalysts of transformation for their organisations,” according to Khurshed Dordi, COO for Deutsche Bank Group in India. Deutsche Bank’s GCC, set up in 2005, now employs more than 18,500 people, a report by the bank says.
India’s push to expand its GCC footprint beyond metros signals a strategic shift toward innovation-led growth in emerging cities. With strong policy support and rising talent hubs, the next wave of global innovation could well be rooted in tier two and three India.
