**Bengaluru**: India is transforming its Global Capability Centers from cost-driven operations into innovation hubs, with projections for significant economic output and workforce growth. Key factors include a vast talent pool, government support, and successful case studies from companies like Amadeus and Eastman Chemical.
India is currently transforming its image on the global stage as a prime destination for Global Capability Centers (GCCs), which have evolved from being merely cost-effective back offices to becoming leading innovation hubs vital for technological progress and driving business outcomes worldwide.
The significant transition of GCCs in India underscores the nation’s burgeoning role within the global digital economy, highlighted by the success of companies such as Amadeus and Eastman Chemical, which increasingly rely on their Indian operations for artificial intelligence-driven solutions and modern technological platforms.
Bengaluru is at the forefront of this transformation, responsible for 39% of GCC revenue. Following Bengaluru, Hyderabad and Pune contribute 20% and 15% respectively, while 26% of the revenue comes from other cities. Notably, there is a growing trend of GCCs expanding their operations into Tier 2 and Tier 3 cities, including Ahmedabad, Kochi, Thiruvananthapuram, and Coimbatore, thus diversifying the GCC landscape and fostering inclusive growth.
According to DD Mishra, VP Analyst at Gartner, India’s attractiveness stems from several factors including an extensive talent pool, infrastructural advantages, government support, and high levels of language proficiency. He stated, “India is a lucrative destination for GCCs, supported by several factors: talent availability, government support, infrastructure, physical connectivity, language proficiency, cost advantages, cultural and operational flexibility, and productivity.”
Global businesses seeking to navigate challenging economic climates are increasingly turning to India for its stable and robust ecosystem conducive to GCC operations. The country is particularly notable for its wealth of STEM graduates and innovative talent. Saurabh Gupta, President of Research and Advisory Services at HFS Research, remarked that “no region in the world comes close to India’s ability to develop talent at scale.”
A prime example of a GCC leading innovation is Amadeus, which attributes 40% of its global product development to its Indian operations, focusing on AI-driven travel solutions. “By fostering a culture of continuous learning, our GCC ensures agility in adopting cutting-edge technologies,” stated Sreejith AR, Head of Creation Platform and Shared Services, APAC, at Amadeus.
The Karnataka state government is notably backing this growth with policies aimed at achieving $50 billion in economic output by 2029 and attracting an estimated 500 new GCCs, potentially creating over 350,000 jobs. Such initiatives underscore the government’s continued support for innovation and R&D within the sector.
As GCCs in India evolve, they are no longer merely operational centres; rather, they are pivotal in developing and implementing next-generation technologies. The shift has seen GCCs redefined as strategic entities focused on engineering and innovation, with significant investments pouring in to enhance their capabilities.
Gupta elaborated on India’s competitive edge, noting that it surpasses rivals like Southeast Asia and Eastern Europe in terms of a mature talent pipeline, superior infrastructure, and established partnerships with global service providers. This has positioned Indian GCCs as vital components in global business strategies.
However, despite the clear advantages, challenges exist especially in Tier 2 and Tier 3 cities, where inadequate infrastructure and limited access to senior-level talent hinder potential growth. Addressing these challenges will necessitate collaboration between various stakeholders including government entities, the private sector, and educational institutions.
GCCs in India are already setting global standards for innovation, with firms developing advanced digital and AI-powered solutions. A notable success story includes a GCC of a British retail multinational that created a proprietary GPT platform that markedly increased efficiency in procurement decision-making, achieving accuracy levels of 90–96%. Similarly, Eastman Chemical has collaborated with industry experts to develop an AI platform that monitors and predicts the performance of thermal fluids, which has major implications for operational safety and cost efficiency.
Looking ahead, the GCC sector in India is projected to continue its upward trajectory, with HFS Research predicting a workforce exceeding 4 million by 2029 and annual spending doubling to $100 billion within the next five years. Key growth drivers include a steady influx of qualified graduates, alignment with holistic corporate goals, and a shift in industry perception that is attracting talent to GCCs from startups and global tech companies.
As the landscape continues to evolve, GCCs must embrace transformative strategies that emphasise AI-driven models and the integration of in-house and third-party services, enhancing scalability and flexibility. Furthermore, promoting sustainability initiatives and fostering public-private partnerships will be central to developing successfully competitive ecosystems in regions beyond the main metropolitan areas.
India’s journey from cost-centric operations to sophisticated innovation hubs showcases its potential in shaping the global technology discourse, placing it at the forefront of future developments in business and technology. As stated by Sreejith AR, “The future of GCCs in India is being shaped by key trends such as digital transformation, a focus on innovation, enhanced customer experience, and the growing emphasis on sustainability.” The emphasis on innovation and strategic collaboration marks a significant chapter in India’s pursuit of becoming a formidable leader in the global GCC landscape.
Source: Noah Wire Services
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