The context for Union Budget 2026 was shaped last year when Finance Minister Nirmala Sitharaman, speaking on the floor of Parliament during Union Budget 2025, stated that the government would work towards a national-level policy framework for Global Capability Centres (GCCs). The announcement marked the first formal recognition, at the highest policy level, of GCCs as a strategic pillar of India’s economic and technology landscape.
Building on this commitment, the Ministry of Electronics and Information Technology (MeitY) subsequently began work on a roadmap for the next wave of GCCs, with a focus on Tier-2 cities, talent availability, digital infrastructure, and industry–academia collaboration, an effort earlier reported by GCC Pulse. Together, these signals set the stage for Union Budget 2026, where expectations from the GCC ecosystem now extend well beyond incremental incentives to structural, long-term policy enablers.
Over the last decade, India’s GCCs have undergone a profound transformation. What began as execution-focused delivery arms has evolved into integral contributors to global innovation, engineering, data, cybersecurity, and enterprise decision-making. Today, Indian GCCs increasingly serve as sandboxes for global enterprises to design, test, and scale organisation-wide transformation initiatives.
From a policy and regulatory standpoint, Bharath Reddy, Partner at Cyril Amarchand Mangaldas, underscores that India’s next phase of GCC growth will be driven by structural reforms rather than short-term incentives.
India’s GCC ecosystem is now a sandbox for global enterprises to scale transformation. As Budget deliberations begin, the focus is shifting from incentives to structural policy, with future growth driven by ecosystem depth, regulatory clarity, talent sustainability, and technological readiness.
— Bharath Reddy, Partner, Cyril Amarchand Mangaldas
Strengthening the GCC Ecosystem and Infrastructure
India’s metro cities continue to offer mature infrastructure and deep talent pools, but rising costs, congestion, and capacity pressures are beginning to constrain scalability. At the same time, several Tier-2 and Tier-3 locations show promise but lack the ecosystem maturity required for sustained GCC operations.
A recurring challenge lies in the disconnect between physical infrastructure and functional readiness, where office space exists, but talent density, transport connectivity, housing, and ancillary services lag.
From a policy perspective, expectations include:
- A central-level GCC policy with tangible, outcome-linked incentives
- An ecosystem-led infrastructure approach, integrating transport, digital connectivity, housing, and talent
- Single-window clearances across the Central and State levels to reduce time, cost, and compliance friction
- Targeted incentives for Tier-2 and Tier-3 cities linked to skilled employment and long-term GCC commitments
- Formal recognition of GCCs as strategic economic anchors, supported by dedicated facilitation mechanisms
- Government-backed plug-and-play IT parks to accelerate onboarding and scale
Tax Incentives and the Case for Centralised Clarity
For GCCs, tax competitiveness today is defined as much by predictability and simplicity as by rates. Fragmented state-level incentives, inconsistent interpretations, and evolving compliance requirements make India harder to benchmark against competing GCC destinations for high-value mandates.
While states such as Karnataka, Telangana, Gujarat, Maharashtra, and M.P have introduced progressive GCC policies, the variation in incentive structures and compliance frameworks creates complexity. A centralised and clearly articulated incentive framework, standardising eligibility, timelines, and outcomes, would materially improve India’s attractiveness for new and expanding GCC investments.
Safe Harbours, Concessional Regimes, and Global Mandate Confidence
From a tax policy standpoint, Manisha Gupta, Partner at Deloitte India, highlights the need to recalibrate and rationalise India’s Safe Harbour Rules (SHR) for GCCs. The current eligibility threshold of INR 300 crore limits participation and does not reflect the scale or sophistication of modern GCC operations.
India’s safe harbour rules for GCCs need to be recalibrated and rationalised to enhance tax competitiveness. Broadening the current thresholds would provide certainty to a much wider set of GCCs, particularly those engaged in high-end engineering, R&D, and digital mandates.
— Manisha Gupta, Partner, Deloitte India
To promote high-value GCC activities, concessional tax regimes could be introduced for centres focused on R&D, product development, and IP creation. These may include reduced effective corporate tax rates and time-bound tax holidays within notified Digital Economic Zones, especially in Tier-2 and Tier-3 cities. A concessional corporate tax rate for GCCs commencing operations within a defined window—similar to incentives previously extended to manufacturing — could further accelerate investment.
Multinational enterprises also continue to express concern around Permanent Establishment (PE) and Place of Effective Management (POEM) risks as Indian GCC leaders assume global strategic roles.
Talent, Retention, and Labour Readiness
India’s talent pool remains the strongest driver of GCC growth, but demand-supply gaps in advanced digital skills are creating wage inflation, attrition, and geographic concentration risks. The next phase of growth will depend on continuous skill renewal, not one-time hiring surges.
Budget expectations include incentives for talent development, government-backed skilling programmes, tax support for internal capability academies, and policy backing for hybrid and remote work models. Simplifying labour-law compliance and addressing implementation challenges under the Labour Codes would further improve India’s business environment.
Chetana Parashar, Head – HR, 7-Eleven Global Solution Center (GSC), underscores the need for budget support that enables continuous reskilling and a shift toward skills-first talent strategies as GCCs take on higher-value mandates.
As India approaches the Union Budget 2026, the HR and GCC ecosystem is looking for measures that deepen talent maturity and strengthen long-term operational stability. Industry leaders are hopeful of a National GCC Framework that brings regulatory clarity, particularly for high-end R&D and AI-driven roles. A key expectation is the expansion of skilling incentives, with greater emphasis on “recruit-to-role” models to address critical gaps in emerging areas such as cybersecurity and data engineering.
— Chetana Parashar, Head – HR, 7-Eleven Global Solution Center (GSC)
Technology Modernisation and Scalable Growth
As GCCs take on global mandates, investments in cloud platforms, cybersecurity, AI systems, automation, and green IT are no longer optional—they are foundational. Budget support for cloud-first architectures, AI adoption, cybersecurity resilience, and digital infrastructure will be critical to enabling GCCs to scale securely and efficiently.
Looking Ahead
At GCC Pulse, we believe the Union Budget 2026 is not merely a fiscal event. It is an opportunity to re-architect India’s GCC value proposition. The shift is clear: from scale to sophistication, from incentives to institutions, and from cost advantage to strategic advantage.
India has the foundation. India’s Union Budget 2026 will determine how decisively it builds on it.
