India Gears Up For A Larger GCC Leap

India's Global Capability Centres (GCCs) are exhibiting their increasing ability to meet international tech demands, with over 1,600+ GCCs currently operational. In fact, a Deloitte Technology Trends 2024 report highlights this growth and global dominance of India's GCC market, predicting that it will surpass USD 100 billion by 2030, fueled by the emergence of approximately 2,500 more GCCs employing over 4.5 million individuals soon.

The Trend Of Indian GCCs For 2024

Acknowledging this advancement, Nilesh Thakker, President at Zinnov, told BW Businessworld that GCCs are no longer limited to supporting back-office functions; they now play a crucial role in generating revenue, fostering innovation, ensuring process excellence, and driving business growth.

Thakker provided an analysis of the factors influencing the GCC growth in India by citing the trends for 2024. He stressed that these trends include the establishment of Centres of Excellence (CoEs) in new technologies, emergence of global roles, focus on the Environmental, Social and Governance (ESG) agenda, the establishment of multi-functional centres and the importance of mature engineering talent in shaping the GCC landscape.

Thakker explained that the establishment of Centres of Excellence (CoEs) will facilitate the development of specialised knowledge and will function as a central hub for digital innovation and process excellence. 

"Within the realm of ESG agenda GCCs will be at the forefront of driving progress in the 'E' (environmental sustainability) aspect of ESG. Subsequently, the implementation of multi-functional centres will enable GCCs to serve as strategic partners, promoting operational efficiency and fostering growth for the global organisations they support. Additionally, the presence of skilled engineering talent will contribute to the establishment of a thriving global innovation hub, resulting in remarkable revenue growth of over 14 per cent and positioning the country as a significant player on the global stage," he added.

“India currently has over 5000 leaders in technology and business sectors. Projections suggest that this figure will rise to more than 20,000 by 2030. This trend, known as ‘Leadership Arbitrage,’ is attributed to a deep understanding of business, customer requirements, technology, and domain expertise.” - Nilesh Thakker, President at Zinnov

Talking about the latest trends, Deepa Seshadri Partner, CIO Programme Leader, Deloitte Consulting LLP said, “These GCCs will be instrumental in fostering innovation, establishing centers of excellence and influencing decision-making processes. Unlike in the past, where GCCs were viewed as mere locations, they are now considered as 'extended arms of global corporations'. This shift in perspective emphasises the crucial role that GCCs will play in shaping how global companies operate, ultimately adding value to the Indian economy.”

GCCs Transforming Employment Landscape 

The report on India GCC Trends for Q4 CY2023, conducted by Nasscom and Zinnov, highlighted the GCC advancements. According to the report, a total of 2,740 GCCs were established in India during FY2023, with a deployment of over 1.66 million talented individuals throughout the year. Further, the report emphasised the addition of 10 new GCCs between October and December 2023.

But the report underlined that the path has not been devoid of obstacles. Recessionary warnings, interest rate hikes, geopolitical tensions, and inflation have all been significant challenges. Consequently, these have led to a decline in growth of the GCCs in the early months of 2023 as businesses grappled with uncertainties and reassessed their strategies.

Debasis Panda, SVP of Global Operations and Head of TransUnion Global Capability Centers - India, Costa Rica, and South Africa said Indian GCCs are constantly improving their Employer Value Proposition (EVP) to attract, engage and retain top talent. 

He shared they are staying ahead of the curve by driving digital transformation and innovation and leading the way in adopting emerging technologies such as artificial intelligence, machine learning, cloud computing, data science and analytics. 

“GCCs in India have shown resilience and adaptability, successfully navigated complex market dynamics and met evolving customer demands. Their exceptional performance validates their crucial role in driving business growth, promoting collaboration, and ensuring long-term success in the global marketplace.” - Debasis Panda, TransUnion

GCCs Reach Beyond Metro Cities

The previously mentioned Nasscom-Zinnov report also indicated that the latest data for Q4 2023 showed a minor deceleration in GCC growth compared to the resurgence observed in Q3 CY2023. In Q3, 10 new centres were established, mainly in Tier-1 cities such as Bengaluru, Hyderabad, Chennai and Pune, which have traditionally been the focal points of India's GCC ecosystem.

Despite the slowdown, it is important to highlight that Bhubaneswar, a Tier-2 city, attracted one new GCC, indicating a broader geographical reach for these centers and underscoring the untapped potential of India's smaller cities.

In a similar vein, Thakker from Zinnov said, India's GCC landscape is expanding its reach beyond major cities, with companies like Heinz and Signature IP establishing new centres and existing GCCs expanding into Tier-2 cities such as Ahmedabad, Kolkata and Coimbatore. This shift is driven by a combination of government incentives, similar to those in GIFT City in Ahmedabad, Karnataka Digital Economy Mission and Tamil Nadu Startup and Innovations Mission, as well as a growing talent pool fueled by reverse migration and improved education systems in these cities.

The emergence of Tier-2 GCC hubs creates a mutually beneficial situation where companies can take advantage of a cost-effective and skilled workforce, while these cities experience economic growth and job creation. With more than 36 GCCs in Ahmedabad, over 30 in Kolkata and 25 in Coimbatore, Tier-2 cities are solidifying their position as key players in India's future GCC ecosystem.

However, Suresh Kannan, Chief Product Officer at Model N feels that the importance of a GCC in a Tier-2 or -3 city is decreasing. “Talent can now work from anywhere, regardless of location.”

Source: India GCC Trends for Q4 CY2023 report by Nasscom and Zinnov

He stressed that the talent pool of GCCs is a constant presence. When a GCC grows to a significant size (1,000 plus employees), it usually sets up a centre in a tier-2 or -3 city. The pandemic years allowed for nationwide recruitment, leading to a significant portion of talent still working remotely, thanks to the work-from-home policies that GCCs have continued post-pandemic.