The remarkable growth of Global Capability Centres (GCCs) in India is fueling the nation's economy across multiple sectors. Currently, over 1,600 GCCs employ 1.5 million people and generate $46 billion in revenue - more than doubling the $20 billion generated in 2016. Experts forecast this revenue to reach $100 billion by 2030, as GCCs continue diversifying their service offerings.
In a remarkable transformation, the explosive growth of Global Capability Centres (GCCs) in India has emerged as a "force multiplier" for the nation's economy, industry experts and analysts have observed. These GCCs, which provide technical, operational, research, and innovation services to some of the world's largest corporations, are proving to be a powerful catalyst for India's economic prosperity.
Currently, over 1,600 GCCs, employing an estimated 1.5 million people across India's major cities, are collectively generating cumulative revenue of about $46 billion. This impressive figure is more than double the estimated $20 billion generated by around 1,000 such centres in 2016, according to a report by ICICI Securities. The report further forecasts GCC revenue to reach an astounding $100 billion by 2030.
The growth of these GCCs has been fueled by the diversification of their offerings. In addition to their mainstay capabilities in areas like finance, HR, analytics, IT, procurement, and data governance, they have expanded into services such as legal and marketing. This diversification has not only strengthened the GCCs themselves but has also had a ripple effect on peripheral sectors, including real estate, retail, staffing, and infrastructure.
"The hefty spending power of (GCC) employees fuels local businesses like kirana stores, restaurants, malls, and hospitals, creating roughly one million jobs in domestic services alone and strengthening India's economic fabric," said Palash Gupta, R&D & engineering leader at Verint India and a member of the industry lobby Nasscom's Product Council.
Gupta further noted that GCCs generate an estimated $35-40 billion in additional economic output across real estate, IT, hospitality, and professional services. This surge in demand has had a significant impact on the real estate sector, with a substantial 17% increase in office space leasing specifically for GCC centres in cities like Bengaluru, Hyderabad, and Pune during the fiscal year 2024.
The growth of GCCs has also led to a surge in demand for skilled professionals, particularly in sectors like healthcare and automotive, with a 20-25% increase in hiring. Additionally, the focus on research and development (R&D) centres has intensified, indicating a shift towards innovation-driven growth. Data science, data engineering, and artificial intelligence (AI) have emerged as pivotal skill sets, experiencing a 30% increase in demand.
"GCCs are a cornerstone of India's economic strength. While directly employing over 1.5 million, contributing $1.2-1.3 billion in annual taxes, and approximately 6% of direct income tax by GCC employees, their impact extends far beyond," said Gupta of Verint India.
India's telecom companies are also recognizing the strategic importance of GCCs, investing heavily in dedicated leased lines, fibre rollouts, secure networking solutions, and high-speed internet access to cater to the growing needs of these centres. While GCCs currently contribute only 4-5% of a telco's enterprise business, analysts predict a sharp rise in the coming years.
In conclusion, the explosive growth of Global Capability Centres in India has become a driving force for the country's sustained economic prosperity. By diversifying their offerings, creating jobs, boosting peripheral sectors, and fueling innovation, these GCCs have cemented their position as a cornerstone of India's economic strength. As the country continues to embrace this transformative trend, the future looks bright for India's economic growth and global competitiveness.