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Evolution and Impact of Global Capability Centers in India



  Apr 29, 2024

Evolution and Impact of Global Capability Centers (GCCs) in India



Global Capability Centers (GCCs) in India are undergoing a transformative shift from providing 24x7 back-end operational support to becoming pivotal centers for innovation and front-line operations for their parent multinational corporations (MNCs). These centers are increasingly recognized not just as cost-saving units but as integral, in-house tech outposts driving substantial technological advancements.

Key Facts About GCCs in India

• Presence and Scope: India hosts over 1,580 captive centers, employing approximately 1.6 million people. This workforce represents one-fourth of the direct employment provided by the Indian IT services industry.

• Economic Contribution: The GCC industry in India is valued at over $40 billion, with these centers performing crucial technology and innovation tasks internally—functions traditionally outsourced to third-party IT service giants like TCS, Infosys, and Wipro.

FAQs About Global Capability Centers in India

1. What are Global Capability Centers (GCCs)?

GCCs are specialized units set up by multinational corporations to handle various strategic functions such as IT, finance, HR, and operations management. They serve as the technological and operational backbone of the parent company, ensuring smooth global operations.

2. Why is India a preferred location for setting up GCCs?

India offers a combination of skilled talent, supportive government policies, robust infrastructure, and cost advantages, making it an attractive destination for multinational corporations to establish their GCCs.

3. How are GCCs transforming from back-end support to front-line innovation centers?

Initially focused on back-end support, GCCs in India are now evolving into research and development hubs that lead major technological innovations and strategic initiatives for their parent companies.

4. What impact do GCCs have on the Indian economy?

GCCs significantly contribute to India’s economy by generating over $40 billion in revenue and employing 1.6 million people. They also enhance the technological capabilities of India by retaining high-value tasks within the country rather than outsourcing them.

5. Do all GCCs in India have commercial operations?

Not all GCCs in India have commercial operations; some function purely as technology and innovation centers without direct commercial engagement in the local market.

6. How does the employment impact of GCCs compare to the Indian IT industry?

GCCs employ one-fourth of the workforce directly engaged by the Indian IT services industry, highlighting their significant role in job creation and skill development in the technology sector.

This comprehensive overview and the detailed FAQs reflect the expanding role and growing significance of GCCs in India’s technology landscape and their broader impact on the global operations of multinational corporations.



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