The Union Budget 2025 has given a major push to India’s technology services ecosystem with the announcement of a National Framework for Global Capability Centres (GCCs) aimed at fostering their expansion into Tier-II and Tier-III cities. The framework, outlined by Finance Minister Nirmala Sitharaman in her Budget speech, is set to guide states on promoting GCCs by enhancing talent availability, improving infrastructure, reforming building bylaws, and strengthening industry collaborations.

With India’s GCC market witnessing rapid growth, several states, including Madhya Pradesh, Uttar Pradesh, Telangana, and Andhra Pradesh, are actively drafting policies to attract multinational corporations. These efforts aim to decentralise back-office operations from traditional IT hubs like Bengaluru and the National Capital Region (NCR) to emerging cities, creating new employment opportunities and boosting regional economies.

Industry body NASSCOM lauded the government’s initiative, emphasising the significance of public-private collaboration in enhancing talent development and infrastructure in Tier-II cities. “Introducing a national guidance framework is a crucial step towards fostering sustainable growth of GCCs across India,” NASSCOM said in a statement.

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According to insights from the Economic Survey 2024-25, India has witnessed a significant increase in the number of GCCs, growing from 1,430 in FY19 to over 1,700 in FY24. Notably, Engineering R&D GCCs are expanding 1.3 times faster than other segments, driven by investments in sectors such as aerospace, defence, semiconductors, and finance.

With additional incentives and policy support, Tier-II cities are set to emerge as key destinations for global corporations, reinforcing India’s position as a global technology and business hub.

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