Global Capability Center (GCC) in India: A Complete Guide

Global Capability Centers (GCCs) are no longer just offshore cost-saving units, they’ve become strategic innovation engines for multinational companies. Whether you’re planning to set up, scale, or optimize a GCC in India, this guide covers everything you need: from why India is the preferred destination to step-by-step setup, challenges, best practices, and future trends.

What is GCC in India?[toc=What is GCC in India]

A Global Capability Center (GCC), also known as a captive center or Global In-House Center (GIC), is a wholly-owned subsidiary of a multinational corporation established to perform critical functions for the parent company. It’s more than a traditional outsourced center; it's a strategic extension of a global business, giving the company direct control over its global operations, talent, and intellectual property. The GCC in India has evolved from a simple solution for cost savings to a strategic hub for innovation and business growth.

Key Features of GCCs in India:

• Deliver core functions like software development, data analytics, and process automation.
• Attract top talent and skilled professionals from India’s highly skilled workforce.
• Foster digital transformation and operational efficiency for global projects.
• Enable cost efficiency and substantial cost savings for parent companies.
• Operate within a mature GCC ecosystem supported by ongoing government and industry investment.

Why are GCCs in India growing rapidly?[toc=Indian GCCs Growing Rapidly]

Drawing from our direct experience helping global companies establish GCCs in India, we have seen the Global Capability Centers in India growing rapidly due to several critical advantages:

• Rich Talent Pool: India offers a vast and diverse talent pool of skilled professionals, especially in data science, software development, process automation, and emerging technologies. Access to global talent ensures innovation and operational efficiency for global projects.
• Cost Efficiency: Significant cost savings, combined with value creation, make India attractive for both new and established GCCs. Companies benefit from lower operational costs while investing more in digital transformation and core functions.
• Robust Infrastructure: With robust infrastructure, world-class IT parks, and a conducive environment supported by the Indian government, India enables smooth and scalable global operations.
• Innovation and Digital Transformation: India’s mature GCC ecosystem supports global innovation hubs, driving advancements in cutting-edge technologies, data analytics, and process automation for multinational corporations and parent companies.
• Business-Friendly Ecosystem: Business-friendly policies and support from the Indian government, along with the ability to scale quickly and operate 24/7, provide a competitive edge in the global business landscape.

What are the key GCC hubs in India?[toc=GCC Hubs in India]

India has established itself as a global leader in the Global Capability Center (GCC) landscape, with several cities emerging as prominent hubs for multinational businesses. Our experience has shown that each city offers unique advantages, catering to various sectors and business needs:

• Bengaluru: The top GCC destination, hosting over 880 global capability centres, especially in IT, software development, and innovation. Its vibrant startup ecosystem and skilled engineering workforce attract global companies and parent organizations.
• Hyderabad: Home to 355+ centers, Hyderabad excels in software development and digital transformation. A strong technology talent pool and government-backed innovation initiatives drive its rapid growth as a global operations hub.
• Mumbai: As India’s financial capital, Mumbai supports over 720 GCCs focused on banking, finance, and insurance. Its strategic location and deep talent pool make it ideal for financial services and global business operations.
• Pune: Known for manufacturing and engineering excellence, Pune’s GCCs work on high-value tasks for automotive and engineering firms. Its proximity to top educational institutions supports steady growth in skilled professionals.
• Delhi NCR: This region, including Gurugram and Noida, is a hotspot for e-commerce and retail. Companies benefit from its strong infrastructure, diverse talent pool, and access to a vast consumer market.
• Chennai: With over 305 centers, Chennai specializes in engineering services, automotive, and manufacturing-focused GCCs. A strong STEM graduate base and stable operations make it a hub for engineering innovation.
• Emerging Tier-2 Cities: Cities like Coimbatore, Ahmedabad, and Jaipur are gaining traction as cost-effective alternatives, supported by expanding infrastructure and growing talent pools.

India’s key GCC hubs, each with distinct advantages, enable global companies to leverage skilled professionals, robust infrastructure, and sector-specific expertise for operational efficiency and innovation across their global capability centers.

What are the types of GCCs in India?[toc=Types of GCCs]

In our extensive experience guiding global companies through the Indian market, we’ve seen that Global Capability Centers (GCCs) in India play a diverse and strategic role by serving various business needs across industries.

Here are the main types of GCCs we've helped establish and manage in India:

1. Technology and Innovation Centers: Focus on software development, data analytics, digital transformation, and emerging technologies. These centers drive innovation and process automation, supporting the advancement of cutting-edge technologies and global projects.
2. Shared Services Centers: Deliver core functions such as finance, HR, procurement, and risk management. Their operations are designed to enhance operational efficiency and cost savings by streamlining business processes for global companies.
3. Global Operations Hubs: Manage a wide array of back-office operations, customer support, supply chain, and logistics services to enable seamless global business landscape integration.
4. Research and Development (R&D) Centers: Concentrate on development, testing, and product design. These centers leverage India’s robust infrastructure and rich talent pool to drive innovation and maintain a competitive edge for multinational corporations and parent companies.
5. Specialized Centers: Focus on niche areas like data science, data security, artificial intelligence, or industry-specific functions, leveraging local expertise and India’s diverse skill sets to deliver highly specialized capabilities to existing GCCs and new GCCs.

India’s GCC ecosystem remains dynamic and continues to evolve, accommodating the strategic importance and diverse requirements of global capability centers, established GCCs, and multinational corporations seeking growth, efficiency, and innovation.

How to set up a GCC in India?[toc=How to Set up a GCC]

Establishing a Global Capability Center (GCC) in India is a strategic decision for organizations seeking to leverage cost efficiency, skilled talent, and robust infrastructure.

In our experience, a structured approach is crucial for success. Here’s a clear step-by-step guide based on our hands-on work with GCC setups:

Step 1: Define Objectives and Scope

Before initiating the setup process, clearly define the objectives of the GCC. This includes identifying the specific functions the center will serve, such as IT services, customer support, research and development, or engineering. Align these objectives with the broader goals of the parent organization to ensure coherence in strategy.

Step 2: Conduct a Feasibility Study

A comprehensive feasibility study is essential to assess the viability of establishing a GCC in India. Based on our work with numerous clients, key components of this study should include:

• Market Analysis: Evaluate market conditions, competition, and demand for services.
• Talent Availability: Assess the local talent pool's skills and qualifications.
• Cost Analysis: Estimate operational costs, including salaries, infrastructure, and overheads.
• Risk Assessment: Identify potential risks and challenges associated with setting up operations in India.

Step 3: Select the Right Location

Selecting the right location for your GCC is a critical decision that can significantly impact its success. This step involves evaluating potential cities, considering factors like talent availability, infrastructure, and cost of living. Many companies focus on tech hubs like Bangalore or Hyderabad due to their established IT ecosystems.

Then, choose an office space that meets current needs and allows for future expansion. Factors to consider include accessibility, nearby amenities, and the potential for creating an attractive work environment.

Step 4: Entity Registration and Business Structure

Once you have chosen a location, you must establish a legal entity in India. Common structures include:

• Private Limited Company (PLC): Offers limited liability protection and operational flexibility.
• Limited Liability Partnership (LLP): Suitable for smaller setups with less regulatory overhead.
• Branch Office or Subsidiary: Ideal for companies seeking direct ownership with minimal liability.

Ensure compliance with all legal requirements by registering your entity with relevant authorities.

If you need any help to register a company in India, check out our article "Register a Company in India: Everything You Need to Know", it walks you through the entire process and shows how we can help make it seamless from start to finish.

Step 5: Understand Legal and Regulatory Compliance

Navigating India's legal landscape is critical for establishing a GCC. Key compliance areas include:

• Taxation: Familiarize yourself with corporate tax rates and transfer pricing regulations to avoid disputes.
• Labor Laws: Adhere to employment contracts, provident fund contributions, gratuity policies, and other labor regulations.
• Data Privacy: Implement measures to protect sensitive data in compliance with Indian data protection laws.

Step 6: Infrastructure and Technology Setup

Investing in the right infrastructure is vital for operational efficiency. Design an efficient office layout that supports your operational needs and allows for growth. The layout should promote collaboration while also providing spaces for focused work.

Setting up robust IT systems and networks that integrate smoothly with the parent company's global infrastructure to ensure smooth communication and data flow. Implementing security measures that include both physical security measures to protect the office space and cybersecurity protocols

Step 7: Talent Acquisition and Workforce Planning

Recruiting the right talent is crucial for the success of your GCC. Starts with developing a targeted recruitment strategy. This strategy should include effective employer branding to position your GCC as an attractive workplace. Building your core team involves recruiting skilled professionals who not only have the necessary technical skills but also align with your organizational culture.

Ensure that salary packages are attractive to attract top talent while remaining cost-effective. Implement a thorough onboarding process to ensure new hires can quickly integrate and contribute to the GCC's objectives.

Step 8: Operational Setup

Establish clear operational processes for the effective functioning of a Global Capability Center (GCC). This involves defining workflows, responsibilities, and performance metrics that align with the GCC's objectives. By implementing key performance indicators (KPIs), organizations can measure success and ensure that operations are efficient and effective.

Additionally, creating a governance structure helps maintain alignment with corporate goals and compliance with regulatory requirements.

What are the challenges faced in setting up a GCC in India?[toc=Challenges]

Setting up a Global Capability Center (GCC) in India presents several challenges that companies need to navigate carefully. Drawing from our experience guiding GCC setups, here’s an expert breakdown of the key challenges faced when establishing a GCC:

• Initial Setup Challenges: The initial phase of setting up a GCC is critical. Weak initial setup, including expecting the office manager or recruiting team to handle both operational and strategic tasks, can lead to a poor start.
• Regulatory Compliance: Companies often struggle with understanding and following the various laws and rules set by the Indian government. These include regulations on how to price services between the GCC and the parent company, special rules for operating in certain business zones, and strict labor laws. There are also new data protection laws and rules about handling foreign currency. 
• Talent Acquisition and Retention: Finding and retaining skilled professionals is a significant challenge, especially in emerging markets. GCCs must compete with established IT and technology companies for talent, and high attrition rates can disrupt operations.
• Operational Model and Integration: Setting up an efficient operating model and ensuring tight integration with the parent company can be challenging. Without proper alignment, GCCs may struggle to deliver expected outcomes at scale, face cost overruns, and have difficulty aligning with organizational roadmaps.

What are the best practices for setting up a GCC in India?[toc=Best Practices]

Based on our extensive experience assisting global companies and parent organizations with setting up GCCs in India, we’ve found that adhering to proven best practices ensures operational efficiency, risk management, and long-term success. Here are the most effective approaches:

• Strategic Location Selection: Choose GCC hubs with a rich talent pool and robust infrastructure, such as Bengaluru, Hyderabad, or Pune, to maximize access to skilled professionals and cost efficiency.
• Regulatory Compliance and Data Security: Ensure complete compliance with Indian legal and regulatory requirements, including labor, tax, and data security laws, by leveraging local expertise and established GCC ecosystem support.
• Talent Acquisition and Development: Invest in hiring and nurturing global talent with diverse skill sets relevant to core functions like software development, data analytics, digital transformation, and process automation.
• Robust Infrastructure and Technology: Set up world-class office spaces with cutting edge technologies and strong digital infrastructure to drive innovation and operational efficiency across global operations.
• Governance and Continuous Improvement: Establish transparent governance frameworks, strong risk management practices, and metrics to track operational performance, cost effectiveness, and impact on global capability. Foster an innovation-driven culture to maintain a competitive edge within the global business landscape.

Following these best practices, as seen across established GCCs and new GCCs in India, leads to sustainable growth, seamless global integration, and enhanced strategic importance within your organization.

What is the growth and future outlook for GCC in India?[toc=Growth & Future Outlook]

The GCC in India story is no longer about cost savings; it's a strategic evolution. We've seen global companies move from establishing a simple back office to building full-fledged global capability centers that are critical for their global operations. These centers are now key to driving digital transformation and are integral to the global business landscape.

India is set to become the definitive global hub for GCCs. By 2030, the number of global capability centres is projected to grow significantly, employing millions and making a massive contribution to India's economic growth. This is a testament to the country's highly skilled workforce and its ability to deliver high-quality, high-value work.

Key Drivers of Growth and Value Creation

What we have observed by helping multinational corporations is that the focus has shifted from mere cost efficiency to strategic innovation. Here's what's driving this evolution:

• Capability-led growth: GCCs are no longer just service centers. They are now deeply involved in product development, research and development, and leveraging emerging technologies like artificial intelligence and data analytics.
• Expansion beyond Tier-1 cities: While major hubs like Bengaluru Hyderabad and Delhi NCR remain strong, the expansion into Tier II cities is a major trend. This move helps tap into a wider talent pool and provides access to lower real estate costs, all supported by increasingly robust infrastructure.
• Strategic role in global value chains: GCCs are now taking on more senior, end-to-end roles, from developing cutting edge solutions to ensuring data security. They are viewed by their parent company as a central force for driving innovation and enhancing operational efficiency.
• A strong ecosystem: The indian government's supportive government policies, combined with a thriving start up ecosystem and a deep talent pool, create a conducive environment for global businesses to succeed. This makes India a preferred destination for any company looking to set up a gcc and drive their strategic objectives.

Why choose Wisemonk for setting up a GCC in India?[toc=Why Choose Wisemonk]

Wisemonk is a leading Employer of Record (EOR) in India, dedicated to helping global companies set up and manage Global Capability Centers (GCCs) with ease. Our comprehensive suite of services is designed to ensure a smooth transition and operational efficiency for your GCC, so you can focus on scaling your business.

Key Features of Wisemonk:

• Rapid 2–3 day onboarding and exit management for Indian hires.
• Tailored talent acquisition and recruitment strategies.
• Specialized compliance with Indian payroll and statutory benefits.
• End-to-end equipment procurement and management.
• Dedicated India-based HR (human resources) support and employee self-service portal.

Beyond these core features, we offer comprehensive payroll processing, contractor management, company registration, background verification, work permit & visa assistance, and office setup support. By partnering with us, you gain a trusted local ally who simplifies every aspect of your GCC’s setup and ongoing operations in India, making your expansion seamless and fully compliant.

Let us help you unlock the full potential of your Global Capability Center (GCC) and drive innovation within your organization. Contact us today!

FAQs

What is the GCC model in India?

A Global Capability Center (GCC) is a wholly-owned subsidiary of a multinational corporation, acting as a strategic extension of its global operations. It focuses on leveraging India's highly skilled workforce for tasks ranging from core business functions to cutting-edge product development and innovation.

Which state has more GCCs in India?

Karnataka, with its capital Bengaluru, is the undisputed leader and a major global hub for GCCs in India, housing nearly half of the country's centers. The state's vibrant ecosystem, vast talent pool, and strong infrastructure have made it a preferred destination.

Why is India becoming a GCC hub?

India's rise as a GCC hub is due to its large and highly educated talent pool, a supportive business and government ecosystem, and a focus on strategic innovation. We’ve seen that companies can achieve significant cost effectiveness while also driving digital transformation from India.

Which companies have GCCs in India?

Major global companies from various sectors have established GCCs in India. This includes tech giants like Microsoft, Amazon, and Google, as well as financial services firms like Goldman Sachs and JPMorgan Chase.

How much does it cost to set up a GCC in India?

The cost to set up a GCC in India can vary, but it's generally a fraction of the cost in Western countries. A key advantage is the significant difference in talent pool cost, making the overall operation highly cost-effective and a great way to boost operational efficiency.

How to get a GCC license in India?

There is no specific "GCC license," as it's a business model rather than a regulated entity. The process involves incorporating a private limited company under India's Companies Act and obtaining standard registrations like a Permanent Account Number (PAN) and Goods and Services Tax (GST) number.