Global Capability Center (GCC) in India: A Complete Guide

Introduction

Global capability centers in India have become a cornerstone of innovation and transformation for multinational corporations. These centers, which began as cost-saving back-office operations, have evolved into strategic hubs driving technological advancement and business growth. India has firmly established itself as the “GCC Capital of the World”. Many American companies are leveraging these centers to enhance their company's global operations. The GCC landscape in India has experienced remarkable growth, attributed to factors such as the country's skilled workforce, cost-effectiveness, supportive government policies, and robust infrastructure. Based on our in-depth analysis of the market, this growth has positioned India as an unparalleled destination for GCC operations, with many US as well as other global companies looking to leverage the advantages offered by the country to enhance their company’s global operations. Whether you’re considering setting up a Global Capability Centers (GCC) in India or seeking to understand the dynamics of existing operations, this article offers valuable insights into the thriving GCC ecosystem in India and its significant role in driving India's economic growth.

What is a GCC?

A Global Capability Center (GCC), also known as a captive center or Global In-House Center (GIC), is a strategic offshore unit wholly owned and operated by a multinational corporation. Having guided the establishment of numerous GCCs, we can attest that these centers are designed to leverage global talent pools, cutting-edge technology, and operational efficiencies to deliver critical capabilities and drive innovation for their parent organizations.

What are the growth trends and future outlook for GCCs in India?

The evolution of Global Capability Centers (GCCs) in India has been a remarkable journey. Since the early 2010s, GCCs have proliferated across the country, with significant growth observed in sectors. In 2010, there were around 750 GCCs; by 2020, this number surged to approximately 1,750. As of January 2025, our data shows that India houses over 1,800 GCCs, employing nearly 2 million professionals and contributing approximately USD 64.6 billion in revenue. This growth trajectory is not only driven by large enterprises but also includes a significant influx of mid-sized firms and startups establishing their centers in India, attracted by the country's talent pool. In our experience guiding companies of all sizes, we’ve noticed that the IT sector remains dominant, accounting for about 45% of all GCCs, while other sectors such as financial services, manufacturing, and healthcare are also gaining traction. This statistical growth of GCCs in India reflects their increasing importance in the global business ecosystem.

Future Projections

Looking ahead, based on our analysis and industry forecasts, the future of GCCs in India appears exceptionally bright. By 2030, it is estimated that the number of GCCs will reach between 2,100 and 2,550, with an anticipated workforce expansion to over 2.5 million professionals. The market size for GCCs is projected to grow to USD 100 billion, driven by advancements in technology and an increasing demand for high-value services across various sectors. Having guided several US companies through their GCC journey, we can attest that as organizations continue to centralize their operations in India and leverage its skilled workforce, the country is poised to solidify its position as a global leader in the GCC landscape.

What are the core functions of Global Capability Centers (GCCs)?

Our extensive experience has shown that GCCs provide a range of strategic functions that enhance operational efficiency and drive innovation. Based on our observations and collaborations with various GCCs, here are five core functions that define their essence:

• GCCs oversee application development, maintenance, and support, ensuring effective delivery of technology solutions for business needs.
• They enable digital transformation by utilizing advanced technologies like AI, machine learning, cloud services, and blockchain to enhance operations.
• GCCs drive innovation through research and development, consistently creating new solutions that help organizations remain competitive.
• They manage back-office functions such as finance, HR, procurement, and customer support, streamlining processes and reducing operational costs.
• GCCs leverage data analytics to promote business growth, ensuring compliance and addressing risks in global operations.

By aligning with corporate strategies, GCCs improve overall operational efficiency and provide significant value across various business areas.

Why India is the preferred destination for GCCs?

Having guided numerous global companies in establishing and expanding their GCCs in India, we can confidently attest to the country's unparalleled advantages as a preferred destination for these centers. Our extensive experience in this field has provided us with deep insights into the factors that make India stand out in the global GCC landscape.

Vast Pool of Skilled Talent

In our years of recruiting, we’ve consistently been impressed by the country's skilled workforce, particularly in the technology sector. With over 5 million technology professionals and 1.5 million engineering graduates annually, India provides a deep talent pool for GCCs. The country’s emphasis on education ensure a steady supply of qualified candidates for various GCC roles, from software development to data analytics and AI research.

Cost-Effectiveness and Operational Efficiency

Based on our experience working with GCCs across multiple countries, we can confirm that operations in India offer significant cost savings compared to Western countries, with operational costs typically 40-60% lower. This cost advantage extends beyond just labor, encompassing infrastructure, real estate, and other operational expenses. The combination of high-quality talent and lower costs allows GCC in India to achieve greater operational efficiency and deliver higher value to their parent organizations.

Supportive Government Policies and Infrastructure

Through our close collaboration with government bodies and GCCs, we've seen the positive impact of various policies and initiatives implemented by the Indian government to create a conducive environment for GCC growth. These include tax incentives, simplified regulatory processes, and initiatives like Digital India that enhance the overall technology ecosystem. In our experience setting up GCCs in various locations, we've noticed significant improvements in infrastructure, particularly in major GCC hubs like Bengaluru, Hyderabad, and Delhi NCR, providing a solid foundation for GCC operations.

Innovative Ecosystem and Technology Adoption

Having worked closely with both GCCs and startups in India, we can attest to the country's thriving startup ecosystem and culture of innovation. This environment is highly conducive to GCC growth and evolution. We've witnessed firsthand how India's rapid adoption of emerging technologies such as AI, machine learning, and cloud computing aligns well with the strategic goals of many GCCs, enabling them to support multinational corporations through various global projects. Our partnerships have shown us how this ecosystem fosters collaboration between GCCs, startups, and academic institutions, driving innovation and creating new opportunities for GCC expansion and diversification in India.

What are the types of Global Capability Centers (GCCs) in India?

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Global Capability Centers (GCCs) can be set up in various forms to meet the specific needs of organizations. Our experience has shown that the choice of GCC type often depends on the specific needs and strategic goals of the parent organization. Here are the main types of GCCs we've helped establish and manage in India:

Shared Service Centers

In our work with multinational corporations, we've seen a significant trend towards consolidating similar business functions into centralized units. These GCCs centralize common business functions such as finance, human resources, IT, and procurement, offering a range of support services that are integral to business transformation and innovation. Our experience has shown that by centralizing these functions, organizations can achieve greater efficiency and standardization across their global operations. Shared service centers often leverage economies of scale to reduce costs while improving service quality.

Innovation and R&D Hubs

Innovation-focused GCCs serve as centers of excellence for product development, research, and technological advancement. These hubs are crucial for companies looking to drive innovation and achieve operational excellence in business transformation, thereby staying competitive in rapidly evolving markets. They often collaborate with local universities, startups, and research institutions to foster a culture of innovation and develop cutting-edge solutions.

Technology Centers

GCCs specializing in technology focus on software development, data analytics, cybersecurity, and cloud computing. These centers play a vital role in driving digital transformation initiatives and developing new technological capabilities for their parent organizations. They often house specialized talent in areas such as artificial intelligence, machine learning, and Internet of Things (IoT). By moving up the value chain, these technology centers are enhancing their roles within multinational enterprises, taking on more strategic and innovative tasks rather than just basic support functions.

Customer Support Centers

These GCCs are dedicated to managing customer inquiries, complaints, and feedback. They provide multi-lingual support across various channels, ensuring high-quality customer service on a global scale. Customer support centers often leverage advanced technologies to enhance customer experience and streamline support processes. We've helped implement advanced technologies in these centers to streamline support processes, resulting in improved customer satisfaction and loyalty for our clients.

Engineering and Design Centers

Engineering-focused GCCs handle complex design and development tasks for products and services. These centers are particularly common in industries such as automotive, aerospace, and manufacturing. They often employ highly skilled engineers and designers to work on cutting-edge projects and prototypes.

What are the key GCC hubs in India?

India has established itself as a global leader in the Global Capability Center (GCC) landscape, with several cities emerging as prominent hubs for multinational corporations. Our experience has shown that each city offers unique advantages, catering to various sectors and business needs. Here's an overview of the key GCC hubs in India, based on our direct involvement in setting up and managing centers in these locations:

Bengaluru: The IT Capital

Bengaluru, often referred to as the “Silicon Valley of India,” is the undisputed leader in the GCC sector. With over 880 global capability centers, it accounts for a significant portion of the country’s IT and software services. We've consistently found that approximately 40% of India's engineering and research & development (R&D) professionals are based here, making it an ideal location for innovation-focused GCCs. Major global firms like JP Morgan, Bosch, and Honeywell have established their innovation centers here, leveraging Bengaluru’s vibrant start-up ecosystem and premier educational institutions. The Karnataka government’s proactive policies further enhance its appeal, aiming to add 500 new GCCs by 2029.

Hyderabad: The Rising Star

We've witnessed Hyderabad's rapid ascent in the GCC rankings, currently hosting over 355 centers. Known for its specialization in software development and digital services, it is home to major players like Wells Fargo and GE. The city benefits from a highly skilled workforce, particularly in engineering, technology, and business management, and strong support from institutions such as IIT-Hyderabad. Initiatives by the Telangana government, including the Telangana AI Mission, have fostered an environment ripe for innovation.

Mumbai: Financial Services Hub

As India’s financial capital, Mumbai naturally serves as a hub for financial services-related GCCs. With over 720 centers, it attracts global financial giants like Standard Chartered and Citi. Mumbai’s strengths lie in its deep talent pool in banking, finance, and insurance sectors, contributing significantly to the country's talent pool. The city’s strategic location and established infrastructure make it an ideal base for companies looking to tap into India’s financial markets.

Pune: Manufacturing and Engineering Center

We've seen Pune carve out a niche for itself as a center of excellence in manufacturing and engineering. With a notable presence of automotive companies and engineering firms like BNY Mellon and American Express, Pune's GCCs focus on high-value engineering tasks. The city's skilled workforce is complemented by its proximity to leading educational institutions that produce engineering graduates. In recent years, Pune has witnessed significant growth in GCC space take-up, further solidifying its role as an emerging hub.

Delhi NCR: E-commerce and Retail Hub

The National Capital Region (NCR), encompassing Delhi and surrounding areas like Gurugram and Noida, is rapidly becoming a hotspot for e-commerce and retail-focused GCCs. Major companies such as Amazon and Flipkart have established significant operations here due to the region's vast consumer market and logistics infrastructure. The NCR's diverse talent pool supports various functions from customer service to data analytics, making it an attractive destination for businesses aiming to enhance their e-commerce capabilities.

Chennai: Engineering Excellence

Chennai stands out as a hub for engineering services and manufacturing-related GCCs. The city is home to several automotive giants and aerospace firms that leverage its strong engineering talent base. Chennai's stability in operations combined with its strategic location along the coast facilitates easy access to global markets. Additionally, the city has seen a rise in tech start-ups focusing on EdTech and FinTech sectors, diversifying its GCC landscape.

In addition to these major hubs, tier-2 cities across India are beginning to attract attention from multinational corporations looking for cost-effective solutions without compromising on quality. Cities like Coimbatore, Ahmedabad, and Jaipur are emerging as viable options for setting up GCCs due to their growing infrastructure, skilled workforce, and government incentives aimed at promoting business development.

We've observed that GCCs in India are strategically distributed across various cities, each offering unique advantages and industry-specific expertise. These cities have become key hubs for GCC operations, enabling multinational corporations to leverage their strengths effectively.

How to set up a Global Capability Center (GCC) in India?

Establishing a Global Capability Center (GCC) in India is a strategic move for organizations seeking to leverage the country’s cost advantages, skilled workforce, and robust infrastructure. Our experience has shown that following a structured approach significantly increases the chances of success. Here's a detailed guide based on our extensive work in this field:

Define Objectives and Scope

Before initiating the setup process, clearly define the objectives of the GCC. This includes identifying the specific functions the center will serve, such as IT services, customer support, research and development, or engineering. Align these objectives with the broader goals of the parent organization to ensure coherence in strategy.

Conduct a Feasibility Study

A comprehensive feasibility study is essential to assess the viability of establishing a GCC in India. Based on our work with numerous clients, key components of this study should include:

• Market Analysis: Evaluate market conditions, competition, and demand for services.
• Talent Availability: Assess the local talent pool's skills and qualifications.
• Cost Analysis: Estimate operational costs, including salaries, infrastructure, and overheads.
• Risk Assessment: Identify potential risks and challenges associated with setting up operations in India.

Select the Right Location

Selecting the right location for your GCC is a critical decision that can significantly impact its success. This step involves evaluating potential cities, considering factors like talent availability, infrastructure, and cost of living. Each city in India offers unique advantages, and a thorough assessment will help identify the most suitable location for your specific needs. Many companies focus on tech hubs like Bangalore or Hyderabad due to their established IT ecosystems. Then, choose an office space that meets current needs and allows for future expansion. Factors to consider include accessibility, nearby amenities, and the potential for creating an attractive work environment.

Entity Registration and Business Structure

Once you have chosen a location, you must establish a legal entity in India. Common structures include:

• Private Limited Company (PLC): Offers limited liability protection and operational flexibility.
• Limited Liability Partnership (LLP): Suitable for smaller setups with less regulatory overhead.
• Branch Office or Subsidiary: Ideal for companies seeking direct ownership with minimal liability.

Ensure compliance with all legal requirements by registering your entity with relevant authorities.

Understand Legal and Regulatory Compliance

Navigating India's legal landscape is critical for establishing a GCC. Key compliance areas include:

• Taxation: Familiarize yourself with corporate tax rates and transfer pricing regulations to avoid disputes.
• Labor Laws: Adhere to employment contracts, provident fund contributions, gratuity policies, and other labor regulations.
• Data Privacy: Implement measures to protect sensitive data in compliance with Indian data protection laws.

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Infrastructure and Technology Setup

Investing in the right infrastructure is vital for operational efficiency. Design an efficient office layout that supports your operational needs and allows for growth. The layout should promote collaboration while also providing spaces for focused work. Setting up robust IT systems and networks that integrates seamlessly with the parent company's global infrastructure to ensure smooth communication and data flow. Implementing security measures that includes both physical security measures to protect the office space and cybersecurity protocols

Talent Acquisition and Workforce Planning

Recruiting the right talent is crucial for the success of your GCC. Starts with developing a targeted recruitment strategy. This strategy should include effective employer branding to position your GCC as an attractive workplace. Building your core team involves recruiting skilled professionals who not only have the necessary technical skills but also align with your organizational culture. Ensure that salary packages are attractive to attract top talent while remaining cost-effective. Implement a thorough onboarding process to ensure new hires can quickly integrate and contribute to the GCC's objectives.

Operational Set up

Establish clear operational processes for the effective functioning of a Global Capability Center (GCC). This involves defining workflows, responsibilities, and performance metrics that align with the GCC's objectives. By implementing key performance indicators (KPIs), organizations can measure success and ensure that operations are efficient and effective. Additionally, create a governance structure helps maintain alignment with corporate goals and compliance with regulatory requirements.

By following these detailed steps, organizations can establish successful GCCs that drive innovation, enhance operational efficiency, and contribute significantly to their global business strategies.

What are the key factors to consider when setting up a GCC in India?

Establishing a Global Capability Center (GCC) in India involves careful consideration of various factors that can significantly influence the success of the initiative. Here are the key aspects to keep in mind:

Talent availability

Talent availability is crucial when setting up a GCC, as India offers a vast pool of skilled professionals, particularly in technology and engineering.  Companies should be able to find qualified candidates for various roles in chosen location. Understand the salary trends and competition for talent in chosen locations. Evaluate the long-term sustainability of the talent pool.

Legal and Regulatory Environment

The legal and regulatory environment significantly affects GCC operations. Companies must navigate compliance requirements related to business registration, taxation, labor laws, and data protection. Understanding these regulations is essential to avoid potential pitfalls that could hinder operations. Engaging local legal experts can provide valuable insights into navigating these complexities effectively while taking advantage of favorable government policies aimed at promoting foreign investment.

Cost and Financial Planning

Cost considerations are vital for establishing a GCC, as they impact financial sustainability. India offers significant operational cost advantages—typically 30-70% lower than Western countries. However, we always stress the importance of thorough financial planning, including budgeting for salaries, infrastructure, and ongoing expenses. A well-structured financial plan helps organizations allocate resources effectively while maximizing return on investment.

Time Zone and Connectivity

Time zone alignment and connectivity are important for operational efficiency. India’s geographical location allows for effective collaboration across multiple time zones, facilitating round-the-clock service delivery. Additionally, reliable digital and physical connectivity ensures seamless communication. Companies should evaluate local infrastructure regarding internet connectivity and transportation networks to ensure smooth operations.

Technology and IT Infrastructure

Robust IT infrastructure is paramount for a GCC's success, supporting functions such as software development and customer support. Investing in reliable hardware, software solutions, and cybersecurity measures is essential to protect sensitive information. Leveraging cloud computing technologies enhances scalability and flexibility while reducing costs. Aligning IT infrastructure with organizational needs enables GCCs to drive innovation and maintain competitive advantages.

What legal requirements govern GCC setup in India?

Establishing a Global Capability Center (GCC) in India requires compliance with a robust legal and regulatory framework. Below are the key legal requirements for a seamless GCC setup and operation in India:

Companies Act, 2013

Governs entity registration, requiring GCCs to register as a Private Limited Company with the Ministry of Corporate Affairs (MCA). Our compliance team encourages Directors to obtain a Director Identification Number (DIN) and Digital Signature Certificate (DSC), while foundational documents like the Memorandum and Articles of Association (MoA/AoA) outline operational scope.

Sexual Harassment of Women at Workplace Act, 2013

This law mandates the creation of an Internal Complaints Committee (ICC) at workplaces with 10+ employees to address grievances and ensure a safe workplace. GCCs must display anti-harassment policies, conduct employee training, and submit annual compliance reports to district authorities. Non-compliance attracts penalties and reputational risks.

Provident Fund (PF) and Gratuity Act

Under the EPF Act, 1952, GCCs must contribute 12% of employees’ basic salary (plus DA) to provident funds, matched by employer contributions. These benefits apply to all employees earning ≤₹21,000/month. Non-payment can lead to penalties, including imprisonment.

IT Act, 2000 & Digital Personal Data Protection Act (DPDPA)

The IT Act, 2000 criminalizes cybercrimes like hacking and data breaches, requiring GCCs to implement cybersecurity measures. The upcoming DPDPA (2023) mandates explicit consent for data collection, strict breach reporting within 72 hours, and penalties up to ₹250 crore for violations. GCCs handling cross-border data must align with GDPR and other global standards to avoid dual compliance risks.

SEZ/STPI Guidelines

GCCs in Special Economic Zones (SEZs) or under Software Technology Parks of India (STPI) must follow export commitments and operational restrictions to retain tax benefits.

Additional Considerations

• FEMA Compliance: GCCs must report foreign investments and intra-group transactions to the Reserve Bank of India (RBI).
• Labor Laws: Adherence to state-specific Shops and Establishments Acts for working hours, leave policies, and termination procedures.
• Environmental Regulations: Compliance with E-Waste Management Rules for IT asset disposal.
  

What tax regulations apply to GCCs in India?

India’s tax regime for GCCs involves strategic planning to balance compliance and efficiency:

1. Income Tax Act, 1961
   Private Limited Companies enjoy a 25.17% corporate tax rate, while LLPs face 34.94%. SEZ-based GCCs receive a 100% tax holiday on export profits for the first five years.
2. Transfer Pricing Rules
   GCCs must maintain detailed documentation for intra-group transactions (e.g., service fees, royalties) to justify pricing. The Advance Pricing Agreement (APA) mechanism allows GCCs to pre-negotiate terms with tax authorities, ensuring compliance certainty. Transactions with parent entities must follow arm’s length principles. The 2025 Union Budget introduced a 3-year block period for assessments to reduce disputes. Non-arm’s length adjustments can lead to double taxation and prolonged litigation.
3. Finance Act, 2023
   Withholding tax on foreign payments (royalties, technical fees) increased to 20%, impacting intra-group cost allocations. GCCs must re-evaluate tax treaties to avoid double taxation and ensure foreign vendors file Indian tax returns for refunds.
4. Goods and Services Tax (GST)
   GCCs exporting services qualify as zero-rated supplies, exempt from GST, but must file monthly/quarterly returns.
5. Permanent Establishment (PE) Risks
   Expanding GCC roles (e.g., decision-making, remote work) may trigger PE risks for parent companies, exposing global profits to Indian taxation. Mitigation strategies include limiting authority of local teams and maintaining separate contracts for India-specific activities.

What is the average cost of establishing and operating a GCC in India?

The costs of setting up and operating a Global Capability Center (GCC) in India vary based on multiple factors, ranging from location to operational scope. While specific figures depend on business needs, here are the key considerations:

• Initial Setup Costs: These include expenses for legal entity registration, office space acquisition, and technology infrastructure. Costs fluctuate based on city (tier-1 vs. tier-2/3), office size, and compliance requirements like permits or licenses.
• Infrastructure and Location: Tier-1 cities offer established ecosystems but higher real estate and talent costs. Tier-2/3 cities reduce overheads but may require investments in connectivity, utilities, and talent development.
• Talent Acquisition and Retention: Salaries, training programs, and retention strategies impact costs. Demand for niche skills (AI, cybersecurity) or leadership roles often increases expenditure.
• Regulatory and Compliance Costs: Adhering to tax laws, labor regulations, and data security norms requires ongoing investments in legal counsel, audits, and cybersecurity frameworks.

How to design an effective GCC workspace?

Designing an effective Global Capability Center (GCC) workspace requires balancing functionality, employee well-being, and strategic alignment with business goals. Based on our experience designing GCC workspaces in India, here are actionable strategies to drive productivity, innovation, and talent retention:

Flexible and Collaborative Spaces

Design open floor plans with mobile workstations to encourage collaboration and creativity. Include "jump spaces" for ad-hoc conversations and multi-purpose areas that can transform into social hubs for town halls or break-out sessions. This flexibility supports the diverse needs of GCC operations and fosters innovation.

Ergonomic Workstations

Prioritize employee health and well-being by incorporating ergonomic design principles. Provide adjustable desks, ergonomic chairs, and suitable lighting to reduce strain and enhance comfort. This focus on ergonomics contributes to employee satisfaction and sustained productivity in GCC India operations.

Technology Integration

Seamlessly integrate advanced technologies to support GCC functions. Ensure reliable Wi-Fi, implement state-of-the-art audio-visual systems, and provide collaboration tools. This tech-savvy environment enhances communication with global teams and supports the digital transformation agenda of GCCs.

Functional Zoning

Implement a three-zone approach: Quiet, Transitional, and Interactive. This design principle helps manage acoustics and supports various work styles. The Quiet Zone caters to focused individual work, while the Interactive Zone promotes collaboration and socialization. The Transitional Zone bridges these two, offering versatile spaces for less intense concentration.

Branding and Cultural Integration

Incorporate elements that reflect both the parent company's culture and local Indian influences. This approach helps in creating a unique GCC identity and fosters a sense of belonging among employees. It also aids in attracting global talent by showcasing a blend of international and local work cultures.

What are the key government initiatives for supporting GCCs in India?

India has implemented a multi-layered strategy to position itself as a global hub for Global Capability Centers (GCCs), combining federal policy frameworks, state-level incentives, and infrastructure development. Here’s a structured overview of key initiatives driving GCC growth in India:

National Policy Framework

The Indian government is actively developing a centralized GCC policy to streamline operations and attract multinational corporations:

• Budget 2025 Announcement: A national framework will guide states to promote GCCs in Tier-2/3 cities like Coimbatore, Ahmedabad, and Kochi. It focuses on enhancing talent pipelines, infrastructure upgrades, and industry collaboration.
• Talent Development: Emphasis on skilling in frontier technologies like generative AI, healthcare analytics, and financial intelligence to align with global innovation trends.
• SEZ Benefits: GCCs in Special Economic Zones (SEZs) enjoy tax holidays, duty exemptions, and simplified compliance.

State-Level Initiatives

States are competing to attract GCCs through tailored policies:

• Karnataka: First state to launch a dedicated GCC Policy (2024–2029), aiming to add 500 new GCCs by 2029. Offers rental reimbursements, funding for innovation labs, and payroll subsidies.
• Uttar Pradesh: Targets 1,000 GCCs and 500,000 jobs via 100% stamp duty exemptions and payroll subsidies.
• Maharashtra: Focusing on tech parks and SEZs in Mumbai and Pune, leveraging robust infrastructure and data connectivity.

Infrastructure DevelopmentThe government is prioritizing Grade-A office spaces and digital connectivity:

• Real Estate Push: Developers are building 25–30 million sq ft of office space across cities to meet GCC demand. Tier-2 cities offer 30% lower operational costs compared to metros.
• Logistics Modernization: Upgraded air cargo infrastructure and warehousing in Tier-2 cities to support high-value sectors like aerospace and semiconductors.
• Digital Infrastructure: Enhanced IT parks, 5G connectivity, and cybersecurity frameworks to align with India’s Digital Personal Data Protection (DPDP) Bill, 2023.

R&D and Innovation Incentives

• Budget 2025 Proposals: Plans for incubation hubs and tax concessions for R&D activities to boost IP creation.
• Collaboration with Academia: Public-private partnerships (PPPs) to align STEM curricula with industry needs. India’s 28% share of the global STEM workforce is a key draw.
• Sector-Specific Growth: Aerospace, defense, and semiconductor GCCs are expanding R&D operations, growing 1.3x faster than overall GCC growth.

What are the challenges faced in setting up a GCC in India?

Setting up a Global Capability Center (GCC) in India presents several challenges that companies need to navigate carefully.  Drawing from our experience guiding GCC setups, here’s an expert breakdown of the key challenges faced when establishing a GCC:

Initial Setup Challenges:

The initial phase of setting up a GCC is critical. Weak initial setup, including expecting the office manager or recruiting team to handle both operational and strategic tasks, can lead to a poor start.

Regulatory Compliance:

Companies often struggle with understanding and following the various laws and rules set by the Indian government. These include regulations on how to price services between the GCC and the parent company, special rules for operating in certain business zones, and strict labor laws. There are also new data protection laws and rules about handling foreign currency. 

Talent Acquisition and Retention:

Finding and retaining skilled professionals is a significant challenge, especially in competitive markets. GCCs must compete with established IT and technology companies for talent, and high attrition rates can disrupt operations.

Operational Model and Integration:

Setting up an efficient operating model and ensuring tight integration with the parent company can be challenging. Without proper alignment, GCCs may struggle to deliver expected outcomes at scale, face cost overruns, and have difficulty aligning with organizational roadmaps.

Wisemonk: Your Partner for GCC Success in India

Wisemonk, a leading Employer of Record in India, can support global companies in navigating the complexities of setting up and managing Global Capability Centers (GCCs). Our comprehensive suite of services is designed to ensure a smooth transition and operational efficiency for your GCC in India.

Talent Acquisition and Management:

Wisemonk offers end-to-end talent acquisition services tailored for GCCs. We develop effective strategies to attract top professionals from India's vast skilled workforce. Our team handles resume screening, conducts initial interviews, and submits qualified candidates to you for final selection. We also provide onboarding support to align new hires with your parent organization culture and operational standards.

Payroll and Contractor Payment Services:

We manage comprehensive payroll services for your GCC employees, ensuring timely and accurate payments. Our team handles all aspects of payroll processing, including tax calculations and deductions. For contingent workers, we provide contractor payment services, ensuring compliance with local regulations and timely disbursements.

Legal and Regulatory Compliance:

Navigating India's regulatory landscape can be challenging. Wisemonk helps ensure compliance with Foreign Direct Investment (FDI) regulations, labor laws, and tax requirements. Our local expertise minimizes risks and ensures adherence to all necessary legal frameworks, allowing you to focus on your core business operations.

Infrastructure Setup:

Wisemonk supports the selection of suitable office space for your GCC, considering factors like location, cost, and scalability. We assist in establishing necessary IT infrastructure, including high-speed internet and data centers. Our team also implements robust security measures to protect your sensitive information and intellectual property.

Administrative Support and Equipment Procurement:

We offer ongoing administrative support to ensure smooth day-to-day operations of your GCC. This includes handling various administrative tasks and managing vendor relationships. Our team also takes care of equipment procurement, ensuring your GCC has all the necessary tools and technology to operate efficiently.

Operational Support:

Wisemonk helps establish efficient operational frameworks and standardized processes that integrate seamlessly with your global operations. We focus on quality assurance to ensure consistent high-quality service delivery from your GCC. Our team works closely with you to implement best practices and continuous improvement initiatives.

By partnering with Wisemonk, you gain access to local expertise and a range of services designed to facilitate the successful establishment and operation of your GCC in India. 

Let us help you unlock the full potential of your Global Capability Center (GCC) and drive innovation within your organization.

Contact us today!

FAQs

Why are GCCs important?

GCCs drive innovation, implement digital transformation strategies, and act as technology hubs for multinational corporations (MNCs), enabling cost-efficient scaling and global competitiveness.

How many GCCs operate in India?

As of January 2025, India houses over 1,800 GCCs, employing nearly 2 million professionals and contributing approximately USD 64.6 billion in revenue.

Which cities are GCC hubs in India?

Bengaluru, Hyderabad, Pune, Chennai, and Delhi-NCR dominate, but tier-2 cities like Ahmedabad and Coimbatore are gaining traction post-pandemic

Are GCCs only about cost savings?

No—they now drive core innovation, product development, and global leadership pipelines, moving beyond the cost-benefit narrative.

Why are MNCs establishing GCCs in India?

MNCs choose India for its skilled talent pool (1.5M+ STEM graduates annually), cost efficiency (40-60% savings vs. Western markets), innovation ecosystem (75% of ER&D GCCs), and strategic time zone advantage enabling 24/7 operations. Government initiatives like "Make in India" and tech-focused policies further bolster this trend.

What is the future outlook for GCCs in India?

India’s GCC market is projected to reach $110 billion by 2030, with 2,400–2,550 centers employing 4.5M professionals. Tier-II cities like Coimbatore and Visakhapatnam will drive growth, while GCCs transition into global innovation hubs for AI, metaverse, and advanced analytics.