Leveraging India’s Potential as GCC Hub
Context : The rapidly evolving ecosystem of Global Capability Centres (GCCs) has emerged as the most promising area of collaboration for India and UK as they sign the historic Free Trade Agreement on July 24.
What are GCCs?
Global Capability Centres (GCCs), are mainly offshore centres established by global level firms to provide various specialised services to their parent organisations such as IT services, technological solutions, Research and Development (R&D), talent pool, customer support and other business tasks.
Benefits of Establishing a GCC:-
- Enhanced Quality and Productivity: Through standardized processes and adoption of best practices.
- Access to Global Talent: GCCs taps into global talent pool with specialized skills and expertise.
- Cost Optimization: Lower labor costs and operational efficiencies in specific locations, GCCs can help reduce overall costs.
- Improved Agility and Scalability: GCCs enable companies to adapt quickly to changing business needs and scale their operations as required.
- Innovation and Value Creation: GCCs are increasingly becoming hubs for innovation, driving new product development and process improvements.
- Enhanced Operational Control: Allow companies to maintain greater control over key business functions and processes.
India’s Potential
- India has firmly established itself as a global leader in the GCC sector as substantiate by following facts:-
- As per EY, India consisted of 55% of the world’s GCC centres in 2022, 1,580 centres in 2023.
- By 2024, India’s GCC industry employed over 1.9 million professionals and contributed $64.6 billion to the economy, accounting for more than 1% of India’s GDP.
- The number of GCCs in India is expected to grow from 1,700 to over 2,400 by 2030, with potential expansions reaching 2,550 centres, creating over 2.5 million jobs.
Factors contributing to India’s GCC growth
- Initiatives like GIFT city.
- Economic growth – India becoming the fourth largest economy of the world wuth huge marjet makes it a lucrative destination for investors.
- Talent Hub with diverse pool of talent with expertise especially in technology and finance.
- Hub of IT services– Banglore known as the silicon valley of India.
- Hub for managing complex tax operations- According to a white paper released by Deloitte India, the country is making strides in the global GCC game, as India-based GCCs have emerged as strategic hubs for multinational companies to manage complex global tax operations, transfer pricing, and litigation.
- Conducive Policy Environment – The Ministry of Electronics and Information Technology (MeitY) has formed an industry-led panel to design the national GCC framework outlined in Budget 2025. Its goal is to guide States in promoting GCCs, improving talent, infrastructure, innovation. and legal facilitation.
- Uttar Pradesh hosted GCC conclave to attract investors and launched GCC policy.
What can INDIA-UK FTA offer?
- Overcome Double Taxation challenges.
- Easing regulatory barriers.
- Facilitating smoother movement of professionals via smart mobility solutions.
- Harmonising digital and misaligned data governance standards such as data localisation mandate.
- The agreement can support the expansion of GCCs that serve U.K.-headquartered businesses – or leverage British expertise to serve global markets from India.
- Pave way for robust Intellectual Property Frameworks.
Win win for both
India – Greater U.K. investment and collaboration in the GCC space aligns perfectly with its digital economy ambitions, skilling objectives, and goal of becoming a global hub for high-value services while addressing the unemployment challenge.
UK- The FTA is a timely opportunity to secure access to one of the world’s fastest-growing digital economies, while reinforcing its global services and innovation footprint post-Brexit.
What should India do to leverage this potential?
- Adopt global best practices from governance perspective to achieve its economic Ambitions set for GCCs.
- Evaluate the need for a dedicated National GCC policy.
- Hone the talent skills and diversity.
The future of trade lies not just in goods but also in the services, skills and technology that power the new global economy. The GCCs stand at the intersection of all three. The UK India FTA must become an enabler for GCCs shaping a resilient, knowledge-based corridor between the U.K. and India.