India has become a prime destination for Global Capability Centers (GCCs) due to its unique blend of talent, cost-effectiveness, and supportive government policies. The Indian government has established various Special Economic Zones (SEZs) and Software Technology Parks of India (STPI) to attract foreign investment and foster economic growth. These zones offer a range of benefits that make them particularly attractive for GCCs.
Special Economic Zones (SEZs)
SEZs in India are designated geographical regions governed by the SEZ Act 2006. They are designed to stimulate exports, generate employment opportunities, and attract foreign direct investment by providing a conducive environment for economic growth and development. Here are some key advantages of setting up a GCC in an SEZ:
- Tax Incentives: SEZs offer a 10-year tax holiday in a block of the first 20 years, exemption from duties on all imports for project development, and exemption from excise/VAT on domestic sourcing of capital goods for project development.
- Fiscal Benefits: No foreign ownership restrictions in developing zone infrastructure, freedom to develop townships within the SEZ, and procedural ease for speedy approvals, clearances, and customs procedures.
- Infrastructure: SEZs provide abundant office space, fully-equipped modern infrastructure facilities, perfect storage facilities, and high-quality auditorium & conference rooms. They also offer state-of-the-art telecommunications, high-speed broadband internet facilities, and long-load power backup.
- Employment Generation: SEZs contribute significantly to employment generation, with a focus on both skilled and semi-skilled labor.
- Investment Opportunities: SEZs attract domestic and international investments, promoting industrialization and economic growth through sustainable development.
Software Technology Parks of India (STPI)
STPI is a 100% export-oriented scheme under the Ministry of Electronics and Information Technology (MeitY) aimed at promoting the IT/ITES industry, innovation, R&D, start-ups, and product/IP creation in emerging technologies like IoT, Blockchain, AI, and ML. Here are the key benefits of setting up a GCC in an STPI:
- Single Window Clearance: STPI provides a single window clearance for all regulatory requirements, simplifying the setup process.
- Tax Benefits: STPIs offer exemptions from import duty, VAT, and other taxes on goods and services supplied.
- Infrastructure: STPIs provide high-speed data communication, enabling seamless operations for GCCs.
- Custom Duty: Zero duty on imported capital goods, making it cost-effective for GCCs requiring intensive use of hi-tech equipment.
- GST Benefits: Exemption on domestic purchases, further reducing operational costs.
Geographic Distribution
Major technology parks and SEZs are strategically located across India:
- Bengaluru: Known as the Silicon Valley of India, Bengaluru hosts over 875 GCCs, accounting for 29.4% of all GCC units in the country. It offers a mature technology ecosystem and a thriving startup landscape.
- Hyderabad: With 12% of India's GCC units, Hyderabad has emerged as a major competitor to Bengaluru, particularly in the life sciences sector. The state of Telangana has witnessed significant growth in its life sciences ecosystem, making it an attractive destination for GCCs.
- Pune: Known for its cost-effective real estate and proximity to major engineering and automotive clusters, Pune has recorded significant GCC leasing activity.
- Chennai: Leveraging its strong manufacturing base and STEM education, Chennai has become a hub for GCCs, particularly in the IT sector.
- Delhi NCR: The National Capital Region (NCR) offers robust infrastructure, a large talent pool, and a mature business environment.
State-Specific Initiatives
Different states offer unique advantages for GCCs:
- Karnataka: Through its Digital Economy Policies, Karnataka has positioned Bengaluru as the preferred destination for platform engineering GCCs.
- Telangana: The ICT Policy 2021-26 commits to scaling GCC expansion by strategically strengthening the ecosystem and easing the process of entry and doing business.
- Uttar Pradesh: Its IT and ITeS Policy includes GCCs within the ambit of ITeS, allowing them to claim certain fiscal benefits.
- Andhra Pradesh: The Industrial Development Policy 2023-27 commits to providing support to companies/MNCs setting up GCCs.
How Wisemonk Can Help You Leverage SEZ and Technology Park Benefits
As a leading Employer of Record (EOR) provider in India, Wisemonk offers comprehensive support for establishing and operating your GCC in SEZs and technology parks:
- Location Advisory: Our team provides detailed market analysis, talent assessment, and setup support across all major Indian cities, ensuring you choose the optimal location for your GCC.
- Compliance and Legal Setup: We guide you through the legal requirements, ensuring compliance with local labor laws, tax regulations, and other statutory obligations.
- Talent Management: Wisemonk assists in hiring, onboarding, and managing your workforce, leveraging our deep understanding of the Indian talent market.
- Operational Support: From payroll processing to benefits administration, we handle all aspects of your GCC operations, allowing you to focus on your core business functions.
- Technology Integration: Our advanced technology platform ensures seamless integration with your existing systems, providing real-time reporting and secure data management.
By partnering with Wisemonk, you gain access to local expertise, streamlined processes, and a hassle-free experience in setting up and running your GCC in India. Our end-to-end solutions ensure that your GCC operations are efficient, compliant, and aligned with your strategic business objectives.
