The Global Capability Centres (GCCs) ecosystem has taken a significant turn in 24 years, from the early “captive” days to what we now refer to as Global Capability Centres. The journey of GCCs began in the late 1990s and early 2000s when a few large global organisations, primarily from the United States and Europe, started setting up offshore centres in India. Companies like GE, Citi, and even some early European banks recognised India’s potential. At that time, the predominant reason for this offshoring was cost arbitrage. India offered skilled labour at a fraction of the cost compared to other parts of the world. Global organisations were primarily focused on reducing operational costs by offshoring basic tasks. However, this narrative started to change as the years went by.

THE SHIFT FROM COST TO VALUE: EFFICIENCY AND QUALITY

In the late 2000s, Multinational Corporations (MNCs) realised that the Indian teams delivered output more than cost just savings. The quality and efficiency of work started improving, and the capabilities of these offshore centres became more apparent. The delivery modality shifted, and global organisations began to see the Indian workforce as more than just a back office.

It wasn’t just about maintenance work or testing anymore. Employees were adding tangible value to the business. Whether it was Anti-Money Laundering (AML) screening or operational tasks, the quality of output and the innovation stemming from these centres began to transform how global organisations perceived their Indian operations.

THE TRANSFORMATION: VALUE CREATION AND INNOVATION

By the late 2010s, this transformation had led to the establishment of over 1,000 GCCs in India. What was once called a “Global In-house Centre” (GIC) became recognised as a “Global Capability Center” (GCC). The focus shifted towards value creation, with India becoming a hub of innovation for many multinational companies.

India’s workforce was no longer just maintaining systems or handling operational tasks. They were innovating. They were leading in research and development (R&D), and the ecosystem in India allowed for this growth. Global organisations, once sceptical of offshore capabilities, were now setting up R&D centres here, with some even eyeing revenue generation from their India operations.

THE FUTURE: R&D AND CO-CREATION

Today, many of the world’s largest organisations have established their R&D centres in India. However, what’s even more interesting is the rise of smaller, private equity-funded GCCs. Over the last 10 quarters, 132 new GCCs were set up in India. Nearly 100 GCCs had a workforce of just 25 to 300 people. These smaller GCCs are testing the waters, seeing how they can leverage India’s talent and scale up their operations.

The trend is clear—India is no longer just a cost-saving destination. It has become a strategic location for innovation, co-creation, and scaling. The GCC model has evolved, and today, it’s as much about creating new revenue streams as it is about enhancing capabilities.

WHY INDIA?

So, why is India the preferred destination for GCCs? There are three main reasons:

1. Talent: India has a vast pool of skilled talent. The country’s technical and managerial talent is abundant, and this skilled workforce can drive efficiency and innovation.
2. Innovation: India’s innovation ecosystem has matured significantly. Global organisations are now looking at India not just for support functions but also for cutting-edge R&D and innovation that can drive global competitiveness.
3. Startup Ecosystem: India’s thriving startup ecosystem offers a unique advantage for GCCs. Many organisations
co-create with startups, driving forward-thinking solutions like AI, fintech, and advanced analytics.

Cost is still a factor, but it’s now a secondary consideration for most global companies. The focus has shifted to what India can deliver regarding innovation, capability building, and strategic growth.

Also Read :- India is Leading the Way in GCC Expansion: CBRE

THE TALENT CHALLENGE: ATTRACTION AND RETENTION

While skilled talent is abundant in India, GCCs face challenges in talent attraction and retention. It’s no longer just about hiring people with the right technical skills; there’s a need for cultural alignment, attitude, and capability.

In the current landscape, retaining talent is critical. GCCs must build strong cultural connections and create work environments that foster growth and innovation. It’s about more than just offering a job—it’s about providing a career that challenges and nurtures talent in equal measure.

The evolution of GCCs in India proves the country’s growing role on the global stage. What started as a cost-saving measure has transformed into a strategic play for global organisations. The future of GCCs lies in co-creation, innovation, and talent development. India is well-positioned to lead this charge.

Views expressed by Balasubramaniam MS, Chief Executive Officer, Stratinfinity