India's Rise as a Global Capability Center Hub: Exploring the Growth Trajectory and the Enriching Benefits of GCC

Patricia shared her thoughts on the success of Global Capability Centers (GCC) in India today in a recent conversation with Prisila, Correspondent, Asia Business Outlook. 

Shed some light on why India is the most sought-after destination for multinational companies looking to establish GCCs.

India offers a wide variety of benefits to multinational companies that are aspiring to establish GCCs in the country. Based on our experience building GCCs in India for multinational companies, we know that India continues to be an ideal location for companies to establish a GCC because it is home to a futuristic talent pool, which gives GCCs easy access to a very large workforce.  The Indian talent pool possesses exceptional work ethics, is very tech-savvy, and has an innovative mindset. The huge abundance of technically skilled talent that is also proficient in English language enables a seamless communication and collaboration with multinational companies that they work with.

Multinational companies that are looking to scale their companies will find that the opportunity to scale is larger in India as compared to other countries globally–which acts as a true enabler for organizations that are in search of potential markets where they can expand rapidly. The culture of innovation that is engraved in the DNA of the Indian tech ecosystem fosters creative problem solving and adaptability, which are critical aspects for any business to have a competitive edge in today’s dynamic business landscape. 

India also offers very competitive operational costs while maintaining high quality standards of service. Additionally, due to the strategic geographic location of India, there is the potential to easily manage satellite operations of nearby countries and the globe. 

Lastly, given the country’s large domestic market, establishing a GCC in India not only enables companies to tap into the local market, but also opens-up massive opportunities for further growth and market penetration.

How has the Indian government contributed towards the growth of GCCs in recent times?

The Indian government has played a prominent role in fostering and facilitating the growth of GCCs through various initiatives. India began opening its borders for global businesses around 30-40 years ago and started to create a conducive environment for multinational corporates to operate freely by offering support to all companies in navigating through all the hurdles involved in operating a global business. 

Policies like SEZs have also been instrumental for multinational companies by offering tax advantages for export revenue, with Software Technology Parks in India (STPI) being an early example. Through such policies and initiatives, the government is encouraging foreign businesses to establish their GCCs in India.

Briefly explain the role of GCCs in knowledge transfer and upskilling the local workforce in India.

GCCs form the solid foundation for effective knowledge transfer by leveraging technology as an enabler to facilitate seamless information exchange. There is a symbiotic relationship between business understanding and technical proficiency, which is emphasized without bridging this dual understanding between effective knowledge transfer, and upskilling. 

GCCs also act as value delivery centers rather than just service providers. This distinction hinges on the comprehensive knowledge transfer efforts which create a fertile ground for continuous learning within the GCC ecosystem. Knowledge transfer and upskilling initiatives within a GCC now empower employees to enhance their business acumen, innovate, and influence through their knowledge. This knowledge-rich workforce can then extend its expertise and assist the local workforce. This process clearly explains how GCCs pivot from transactional rules to true value creators by passing a culture of constant learning, knowledge sharing and skill elevation among all employees.

What impact have GCCs had on the overall economy, trade and foreign investment in India? How can it continue the same going forward?

With over 1600 GCCs employing around 1.6 million people and generating revenue of over $46 billion in India today, GCCs have had a significant impact on the country’s economy, trade and foreign investment in recent times.

GCCs bring-in a host of other benefits such as upskilling talent that drives innovation & marketplace dynamism, enhancing business operations, and offering global insights. In order to continue to maintain its status as the premier location for building GCCs, India must continue to capitalize on its strengths such as building a strong talent pool, fostering ideal work ethics, investing in a culture of innovation and so much more. The country must leverage its low-cost advantage while nurturing a talent pipeline through the education system, prioritize emerging technologies, and aligning costs with value creation.

"GCCs pivot from transactional rules to true value creators by passing a culture of constant learning, knowledge sharing and skill elevation among all employees"

How has been the growth trajectory of GCCs in India over the past decade?

The last decade has witnessed an impressive growth trajectory from GCCs in India. This can be mainly attributed to easy availability of skilled talent and its transformation from being just a portfolio hub into a hub of strategic transformation for businesses. 

According to NASSCOM, the number of GCCs operating in India has grown from 1000 to 1600 over the last decade, contributing to a surge in revenue from $19.4 billion to $46 billion. The workforce has subsequently grown from 750,000 to 1.6 million employees today. Some of the key industries that have experienced strong growth recently are automotive, semiconductor, healthcare, retail, and industrial manufacturing. 

Lastly, India currently accounts to around 16 percent of the global R&D exports, which has resulted in the country enhancing its influence in the global business landscape and emerging as a key player in innovation, technology and strategic operations for various industries.