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India is fast emerging as the global hub for Global Capability Centres (GCCs), with multinational companies setting up operations to tap into India’s talent pool and cost advantages. GCCs in India are no longer limited to back-office functions; they are evolving into strategic innovation and R&D hubs that add significant value to global businesses.
While this rapid expansion is a positive sign for India’s digital economy, policymakers are increasingly concerned about the trade-off with IT services exports—a sector that has historically powered India’s economic growth.
Why GCCs Are Booming in India
Availability of skilled tech talent
Competitive costs compared to other markets
Strong digital infrastructure
Proximity to global delivery models
Increasing demand for AI, data science, and cloud expertise
The Policy Dilemma: GCCs vs IT Services Exports
India’s IT services exports contribute significantly to foreign exchange reserves and employment. However, the GCC boom diverts talent from traditional IT outsourcing companies to multinational in-house centers. This raises concerns such as:
Reduced foreign exchange inflows if IT services contracts decline.
Talent migration from IT services to GCCs, creating skill shortages.
Shift in India’s positioning from being a service exporter to a captive delivery base.
Vizzve Finance Insight
According to Vizzve Finance, India’s GCC sector is projected to touch $100 billion by 2030, with over 2,000 GCCs employing more than 3 million professionals. While this transformation strengthens India’s global digital footprint, policymakers must strike a balance to ensure IT exports remain competitive while encouraging GCC-led innovation.
Way Forward
Policy support to IT exporters through tax incentives and R&D funding.
Skill development initiatives to meet dual demands of GCCs and IT firms.
Balanced ecosystem that promotes both global captive centers and export-led IT services.
If India can strategically manage this transition, it can retain its IT services dominance while becoming the world’s GCC hub.
FAQs
Q1. What are Global Capability Centres (GCCs)?
Global Capability Centres are offshore units set up by multinational corporations to handle operations such as IT, finance, R&D, and analytics.
Q2. Why are policymakers worried about GCC growth in India?
Policymakers fear that talent shift towards GCCs could weaken India’s IT services export sector, reducing foreign exchange inflows.
Q3. How big is India’s GCC market expected to become?
As per Vizzve Finance, India’s GCC sector could exceed $100 billion by 2030, with significant job creation.
Q4. How do GCCs differ from IT services exports?
GCCs are captive centers for global companies, whereas IT services firms provide outsourced services to multiple international clients.
Q5. Can India balance GCC growth and IT services exports?
Yes, with the right policies on skill development, incentives, and industry collaboration, India can strengthen both sectors.
Published on : 9th September
Published by : aswini
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