A recent nasscom-Zinnov report put a number on the growing India-based Global Capability Centre (GCC) market, estimating it to reach up to USD 105 billion by 2030, with the current export revenue generated by these GCCs being pegged at about USD 64 billion. While innovations, traditionally, developed at GCCs primarily served global markets, the landscape is slowly shifting with these centres increasingly focusing on meeting the demands of the growing number of GCCs within India, driven by the immense potential for local market growth.
US-headquartered Planview’s CEO Razat Gaurav intends to tap into this opportunity and has aligned the company’s strategy to serve both the GCCs in India and the parent organisations they support globally.
“For us, GCCs will continue to be an important sector because we can help the entire organisations by engaging with the GCC, sitting out of India. We’re seeing a lot of global leaders, like the CIO of a global top 500 company, sitting out of Bangalore, which creates natural synergies for us. We are able to engage with global decision makers based here,” Gaurav explained.
Over the past five years, global roles in India have grown, with more than 6,500 positions now established
The company, which is known for its work and resource optimisation software, has a sizable number of GCCs in India utilising its solutions and expects the number to keep growing. “The GCC movement has positioned us to engage with global decision-makers right here in India. This alignment makes perfect business sense for us. With our largest global centre based in India (Bangalore), we are equipped to efficiently handle everything from sales to post-sales activities for our entire customer base,” added the Planview CEO.
Similarly, a UK-based IT and services provider recently expanded its presence in India by inaugurating a new GCC in Bangalore in May. During the launch, CEO Mike Norris shared with BW Businessworld his belief that GCCs will continue to thrive in India. Despite potential cost advantages in other locations like the Philippines, Norris is confident that India will remain a central hub for GCC growth. He also added that psychological and practical benefits of expanding operations in India, which is seen as a favourable location for such centres.
Computacenter has grown to 1,800 employees in India over the past four and a half years, with a decent portion dedicated to managing global customers remotely, including those in the UK, Germany, France, Belgium, Netherlands, Western Europe, and the US.
“We have about 300-350 employees handling GCC services to India-based International GCC customers, while around 1,000 focus on remote management. Looking ahead, we expect our GCC services to increase from 350 to 450 employees, and overall growth in our Indian operations to double in the next three years. Despite market trends suggesting a shift to new GCCs, we believe in the continued growth and expansion of existing centres in India due to its favourable conditions for scaling operations,” said Norris.
“In recent past, there was a shift for many large organisations with development centres in India. Instead of merely contributing to global portfolios, these centres began creating specialised software development practices and features from India, which was a major revelation for the industry. Today, this has evolved into a unique and valuable capability at scale. GCCs are now driving new research and development (R&D) efforts out of India, whether it’s advancing artificial intelligence or harnessing generative AI. This shift—from inception to development and delivery—is a major global change, and those of us deeply embedded in the ecosystem are very optimistic about its future” – Mohammed Anzy, Vice President and Managing Director at Guidewire India
India-to-India Revenue: A Difficult Conversation
While the recent nasscom-Zinnov report did highlight the potential of GCCs unlocking new growth by monetising “India to India” services, it is a difficult conversation for now as focus for most of these centres are still optimising operations and reducing costs for their parent companies and building next-gen technologies. Unlike traditional outsourcing models, GCCs primarily aim to enhance efficiency and manage expenses within India. This approach often results in lower revenue generation compared to international engagements. The cost profile for GCCs is typically lower and their revenue base is constrained by their India-to-India operations, as opposed to global outsourcing engagements.
Currently, GCCs contribute over 1 per cent to India’s GDP, with this share expected to increase further - ANSR report
Third-party providers are more focused on international deals, such as those involving India-to-US operations, where they engage with larger enterprises that may not have GCCs. Issues like protecting intellectual property and managing restrictive covenants around rebadging further complicate the dynamics for third-party providers working with GCCs.
“GCCs in India mainly focus on improving their parent companies’ operations and reducing costs, which limits their revenue potential compared to international deals. This focus means they operate on lower cost profiles and margins, making it harder for third-party service providers to highlight GCCs, especially when protecting intellectual property and managing rebadging issues come into play,” explained Balasubramanian Sankaranarayanan, President & CEO, Thryve Digital.
Growth And New Paradigm
Captive GCCs have the potential to evolve into independent profit centres or legal entities, serving not only their parent organisations but also external clients. This model allows GCCs to operate with a revenue-focused approach. While this transformation is still in its early stages, the opportunity for GCCs based out of India to act as autonomous units offering services to various stakeholders is huge and could drive substantial innovation.
However, the widespread adoption of this model is still a few years away, as per Srividya Kannan, Founder and Director Avaali Solutions.
“The shift from traditional outsourced BPO models to integrated captive GCCs is still ongoing, and while collaboration between GCCs and their expansion to external clients holds promise, the process will take time. As GCCs continue to mature, their ability to operate as independent entities and explore new revenue streams will become more feasible and beneficial,” Kannan added.
The developments in the GCC space are happening fast and experts now stress that the evolution of GCCs in India extends far beyond mere headcount growth narrative.
