In the last two years, more than 150 multinational companies have set up their Global Capability Centres (GCCs) in India. Today, India houses more than 1,600 GCCs, and the boundaries between GCCs and their headquarters are getting redefined rapidly. At present, GCCs account for more than 1 per cent of the country’s GDP and the share is expected to grow, especially with India’s talent pool of 2.5 million people with multiple skill sets including software product engineering. This enables GCCs to hire talent which is best suited to their requirements and objectives and augurs well for the young demography of the country.

GCCs, known for their tech advancements in India, are diversifying into tax, legal, marketing, and procurement spheres, expanding their footprint in Tier-2 and Tier-3 cities. While Bengaluru, Hyderabad, and Chennai remain primary choices, other preferred Tier-2 destinations include Ahmedabad, Kolkata, Vadodara, and Coimbatore. States like Karnataka, Telangana, and Tamil Nadu drive R&D policies targeting sectors like auto, electric vehicles, electronics, pharma, and life sciences. These policies aim to foster innovation hubs, leveraging industry presence, academic, and R&D ecosystems within the States.

After establishing a presence in finance, software, telecom, and semiconductors, GCCs are increasingly focusing on sectors such as aerospace, automotive, oil and gas, healthcare, and pharma. Notably, numerous global roles in GCCs are now based in India offices. A Nasscom report forecasts housing 20,000 global roles in India by 2030, driven by its nearness to emerging markets.

India’s Engineering Research and Development (ER&D) sector has transitioned from offering mere engineering support to complete ownership of product development initiatives. As per a Nasscom report, ER&D accounts for 56 per cent of India’s GCC revenue, driven by extensive digitisation and the adoption of cloud technology.

The path ahead

India can boost the GCC presence in the country with some changes.

Simplifying the entry process: Establishing or expanding GCC operations in the country poses challenges in managing regulations and talent retention for MNCs. The government needs to work towards streamlining and simplifying regulatory processes making them transparent and efficient. GCCs should align state policies with critical business factors for long-term operational ease and cost-effectiveness.

Building trust and data privacy: With Parliament’s green light to the new Digital Personal Data Protection (DPDP) Act, 2023, navigating data protection regulations will need to be factored in by putting data protection measures in place and investing in robust security measures.

Chalking out a strategic roadmap: To enable a smoother transition towards value creation, GCC leaders need to develop prudent strategies around change management, agility, flexibility and holistic performance metrics.

Empowering the workforce: India’s proximity to emerging markets is a primary reason why parent organisations consider housing strategic global roles in the country. This emphasises the importance of companies investing in leadership development programmes to enable the Indian workforce to assume global responsibilities.

Focusing on cultural integration and inclusivity: Bridging cultural gaps between the parent company’s culture and the local workforce, particularly in Tier-2 cities with deep-rooted local norms, can be intricate and sensitive. Companies must nurture an inclusive and collaborative workplace culture, enabling cultural integration via sensitisation programmes and cross-functional interactions.

Adopting intelligent automation: GCCs looking to grow in terms of size and revenue need to strategise technology adoption, from selecting the right platforms to implementing robust cybersecurity measures and ensuring a secure, tech-enabled environment.

As the line between GCCs and their headquarters continues to blur, these offshore units will need to embrace a forward-looking approach which can anticipate market trends, identify emerging opportunities and show resilience in the face of disruptions.

The writer is Partner and GIC/GCC Market Segment Leader, PwC India

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