The Rise of Global Capability Centres in India: What You Need to Know
India has come a long way since 1984 when Texas Instruments opened the first offshore global capability center (GCC) in the country. Today, India boasts over 1,100 GCCs, making it the world’s leading destination for offshore engineering and business services. In this blog, we’ll take a closer look at the rise of global capability centers in India and why they are becoming more important than ever.
What are Global Capability Centers?
A global capability center (GCC) refers to a captive offshore center or shared services center that provides business and technology process services to its parent company. The goal of setting up a GCC is to reduce operational costs, enhance efficiency and improve the quality of service to the parent company. India has emerged as a preferred location for GCCs due to lower costs of setting up and running operations, a vast pool of technical talent, and favorable policies of the Indian government.
Why India is Perfect for Global Capability Centers?
India’s success as an offshore destination can be attributed to a combination of factors, including a large and diverse talent pool, sound infrastructure, and a business-friendly environment. KPMG, a global professional firm, estimates that GCCs in India have an ROI of 30-40% when compared to operations in the parent country. Companies are also attracted by the abundance of IT and engineering talent in India. Over 3.9 million students graduate from Indian universities every year, many of whom are skilled in science, technology, engineering, and mathematics (STEM) fields.
What Are Some Examples of Global Capability Centers in India?
Many of the world’s leading companies have set up their GCCs in India. For example, GE Healthcare has its healthcare systems R&D center in Bangalore, which employs over 4,000 engineers and scientists. IBM has its largest GCC in India, with more than 150,000 employees engaged in operations like research, development, and customer support. Similarly, the Indian GCC for Swiss banking giant UBS employs over 6,500 workers, who support back-office services like finance, IT, and risk control.
What is the Future of Global Capability Centers in India?
The COVID-19 pandemic has accelerated the need for cost optimization and remote work, making GCCs in India all the more relevant. The rise in demand for digital solutions, combined with the availability of skilled talent in India, further boosts the country’s prospects as a GCC destination in the future. Furthermore, recent government initiatives like the Make in India program and the Digital India campaign have placed a renewed focus on innovation and entrepreneurship, offering a conducive environment for GCCs to thrive.
Key Takeaways
India is the leading global destination for offshore GCCs, with over 1,100 GCCs currently operational in the country. The availability of a vast pool of technical talent, a business-friendly environment, and lower costs of operation makes India a preferred location. Many leading global companies have set up their GCCs in India, including IBM, GE Healthcare, and UBS. The future of GCCs in India looks bright as the COVID-19 pandemic boosts the relevance of remote work and digital solutions. Additionally, government initiatives like Make in India and Digital India campaign further drive innovation and entrepreneurship in the country.
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