India is increasingly becoming the focal point for Global Capability Centers (GCCs), with companies around the world acknowledging its potential as a hub for innovation, research, and development (R&D).
This transformation highlights a shift from India’s traditional role in back-office operations to a strategic center for driving business innovation, digital transformation, and technological advancements.
The country’s emergence as a global leader in the GCC sector is reshaping the commercial real estate market, as demand for office spaces soars to accommodate these innovative centers. From large multinational corporations to smaller firms, India’s offering of a highly skilled workforce and cost-effective solutions has propelled it to the forefront of the GCC expansion trend, as published by The Economic Times.
India has become a dominant player in the evolution of GCCs, with these centers accounting for a significant portion of new office space inventory in the country.
According to data from Cushman & Wakefield, between Q1 2023 and Q2 2024, 124 new GCC companies entered the market, establishing or expanding their operations in India. Nearly two-thirds of these companies hailed from the United States, solidifying India’s position as the largest office hub for U.S. businesses globally.
GCCs in India were once primarily associated with back-office functions like call centers or data entry. However, over the years, their role has evolved into critical hubs for R&D, digital transformation, and strategic business functions. The shift to innovation-driven GCCs is transforming India into a key player in driving global technological advancements, with the country’s dynamic talent pool at the heart of this transformation.
While large corporations have long been establishing GCCs in India, smaller multinational firms are increasingly recognizing the value of setting up operations in the country. In fact, of the 124 new GCC transactions between Q1 2023 and Q2 2024, 55 companies (44%) had annual revenues under $1 billion.
This trend indicates that India’s appeal is no longer limited to Fortune 500 companies. Smaller companies are now leveraging India’s robust tech ecosystem and innovation capabilities to fuel their growth and expansion.
India’s talent pool remains one of the country’s most significant advantages in the global GCC landscape. The nation’s educational system continues to produce a steady stream of highly qualified professionals in fields such as technology, engineering, finance, and healthcare. This skilled workforce is available at a fraction of the cost compared to developed markets, making India an attractive location for companies looking to optimize their operations.
Global companies are tapping into this abundant talent pool to set up centers focused on innovation, product development, and R&D, rather than simply relying on India for cost-effective back-office solutions. As companies worldwide face rising labor costs in their home countries, India offers a competitive edge with its combination of skilled talent and lower operational expenses.
As demand for GCCs rises, India’s commercial real estate sector is adapting to meet the needs of these high-tech centers. The demand for Grade A++ office spaces has surged, as businesses seek office environments that promote collaboration, innovation, and creativity. India’s major cities, including Bengaluru, Gurugram, and Hyderabad, have seen significant growth in the construction of world-class office spaces tailored to the needs of global businesses.
Real estate developers are responding to this demand by offering modern, flexible office spaces equipped with the latest technological infrastructure, sustainability features, and employee-friendly amenities. These developments ensure that global companies can establish their GCCs in environments that foster growth and innovation.
India’s strategic location in South Asia, combined with its status as one of the world’s largest economies, makes it an attractive destination for global businesses. The country’s economic stability, large consumer market, and strong business environment offer multinational corporations a solid foundation for growth. Furthermore, India’s political stability, favorable tax policies, and ease of doing business further enhance its appeal as a GCC destination.
India’s role in the global GCC ecosystem goes beyond cost-effectiveness; it is now seen as a key player in driving business innovation and digital transformation. Global companies are setting up centers in India not only to tap into its skilled workforce but also to leverage its dynamic tech ecosystem and advanced R&D capabilities.
GCCs in India are contributing significantly to the development of new products, technologies, and services. These centers are often involved in patent filings, the creation of intellectual property, and other R&D activities that position India as a leader in global innovation.
In addition to supporting corporate innovation, India’s GCCs are playing an essential role in sectors like fintech, healthcare, and manufacturing, helping companies across industries enhance their offerings and stay competitive in the global market.
India’s growth as a GCC hub spans a range of industries, each of which benefits from the country’s competitive advantages in terms of talent and infrastructure. Some of the most prominent sectors driving this growth include:
The technology sector has long been a key driver of India’s GCC growth. India’s expertise in software development, artificial intelligence, machine learning, and data analytics makes it an attractive location for companies focused on digital transformation. GCCs in India are playing a crucial role in developing cutting-edge solutions for global clients, especially in emerging technologies such as blockchain and AI.
Financial services companies are increasingly turning to India to establish their GCCs. India’s rapidly growing fintech ecosystem, coupled with its skilled workforce in finance and technology, makes it a prime location for innovation in banking, insurance, and regulatory technologies. Indian GCCs are developing solutions that are transforming the global financial services industry, from digital banking platforms to blockchain-based payment systems.
India’s healthcare and life sciences sectors are also witnessing significant growth in GCC establishments. Global pharmaceutical companies are increasingly setting up R&D centers in India to tap into the country’s expertise in drug discovery, clinical trials, and medical research. Additionally, healthcare technology firms are using India’s tech talent to develop innovative health solutions and medical devices that cater to global markets.
India’s manufacturing sector is another area where GCCs are making an impact. Companies in the automotive, engineering, and industrial sectors are establishing R&D and design centers in India, benefiting from the country’s strong manufacturing base and skilled engineers. These centers are driving product innovation, process improvements, and supply chain optimization for global companies.
The future of Global Capability Centers in India remains bright, with continued expansion expected in the coming years. As companies worldwide continue to recognize the value of India’s talent pool, technological capabilities, and cost-effective solutions, the demand for high-quality office spaces will remain strong.
The continued evolution of India’s commercial real estate sector will play a crucial role in supporting the growth of GCCs. Developers will focus on creating flexible, collaborative spaces that promote innovation and attract top talent. As a result, India’s commercial real estate market will continue to grow in line with the expansion of global GCCs.
India has firmly established itself as a global leader in the GCC landscape. With a skilled workforce, world-class infrastructure, and a growing focus on innovation and R&D, the country is well-positioned to continue its rise as a hub for global business operations. The ongoing expansion of GCCs in India is reshaping the country’s commercial real estate market and contributing to its growing influence in the global economy.