India's GCC boom: Fortune 500, mid-sized firms expand with new operations

In the past eight months, several mid-sized GCCs with 1,000-2,000 employees have launched in India, joining larger firms with 10,000-15,000 staff handling diverse functions

India's increasing appeal as a destination for global capability centres (GCCs) is drawing interest from both Fortune 500 giants and numerous smaller and mid-sized companies. These organisations are eager to establish operations in India to capitalise on the country's cost advantages, skilled workforce, and stable business climate, according to a report by The Economic Times.

In the last eight months, several mid-sized GCCs with 1,000-2,000 employees have started operations in India. This follows a trend initiated by larger corporations, some of which now employ between 10,000 and 15,000 people in the country, handling a range of functions from customer support and data analysis to advanced research and development projects, the report added.

Notable new entrants in this category include Flutter Entertainment, Hy-Vee Inc., ChampionX, Neighborly, Blackbox, Okta, and Indus Pharma.

Office space demand

In recent years, Indian GCCs have undergone significant transformation, evolving from conventional knowledge process outsourcing (KPO) and business process outsourcing (BPO) models to becoming sophisticated hubs of knowledge and innovation. This evolution underscores their pivotal role in increasing the demand for office space. Bengaluru and Hyderabad, as leading technology centres, have spearheaded this growth, contributing to 60 per cent of all GCC leasing activity in India since 2021, the report said.

Data from Colliers reveals that technology-centric GCCs have been particularly prominent, representing 40 per cent of total GCC leasing, including major deals, and encompassing over 56 million sq ft of office space since 2021. Additionally, there has been a notable rise in interest from sectors such as banking, financial services, insurance (BFSI), engineering, and manufacturing.

Evolution of GCCs in India

Industry experts note that small and medium-sized businesses are increasingly adopting the proven GCC model to scale their operations, boost productivity, and remain competitive in terms of costs.

The report quoted Gaurav Gupta, partner and GCC industry leader at Deloitte India, as saying that smaller GCCs, given their stage in the maturity curve, are often multifunctional from the outset. Unlike their predecessors who initially focused on transactional processes, these newer GCCs leverage lessons from established models and aim for higher value-added tasks from the beginning, he said, as mentioned in the report.

In the late 1990s and early 2000s, the first wave of GCCs in India was primarily driven by major banks, semiconductor, and software firms, including General Electric, Intel, Amex, Motorola, Citibank, and Bank of America — many of which were part of the Fortune 200.

The subsequent wave saw an influx of companies from the US and Europe across sectors like financial services, manufacturing, and telecom, mainly from the Global 500 category. Today, advancements in technology, data-driven customer insights, heightened competition in established sectors, and innovative leadership are attracting even smaller GCCs to India, the report said.