BENGALURU: In a highly competitive global environment due to its talent endowment and cost advantage, India remains a GCC (global capability centres) favourite, says Economic Survey 2024, which was tabled on July 22.
Starting with Texas Instruments, which had set up its office in Bengaluru in 1985, India has come a long way to being at the epicentre of GCC growth. In the 1990s, other companies followed suit, and many airlines and technology companies started their operations in India. These were called ‘captive centres’ earlier and have now come to be addressed as GICs (global in-house centres) or GCCs.
In 2012, about 760 GCCs were operating out of India. In 2016, that number went over 1000, and as of March 2023, India houses over 1,600 GCCs.
As per a study by Wizmatic, GCCs presently employ 32 lakh people, primarily engineers and scientists. They generated a combined revenue of $46 billion in 2023 and are estimated to generate a total revenue of $121 billion by 2030, roughly 3.5% of India’s GDP. Out of this, $102 billion will represent export earnings.
Highlighting the government's support for GCCs, the survey said strategic interventions under various initiatives like Digital India and policies for easing doing business have streamlined online approvals and licensing processes for GCCs. Initiatives like streamlined tax regulations and compliance procedures for foreign companies for setting up GCCs, flexible labour laws, and single window clearance systems for faster approvals have eased the business process.
It highlighted that Karnataka, Telangana and Tamil Nadu governments have launched research and development (R&D) policies to expand the GCC landscape in sectors such as auto and electric vehicles, electronics, pharma and life sciences in the states. Telangana contributes to over 30% of the country's pharma production and is home to more than 1,000 life sciences companies and over 200 FDA-approved sites for producing innovative and generic medicines, it highlighted.
Also, GCCs are increasingly evaluating tier-II towns to expand their operations. As per a CBRE research report, during H1 of 2023, about 22% of GCC centres were set up in tier-II cities, driven by the availability of existing and fresh talent.