From Cost-Hub to Innovation-Engine: Next Phase of Global Capability Centres in India

Introduction

India has long been the dominant destination for ­­global capability centres (GCCs) — and it’s now entering its next chapter. The narrative isn’t just about “offshoring for cost” any more: Indian GCCs are transforming into innovation engines, strategic hubs and growth levers for global enterprises. This shift has profound implications for companies, talent, cities and ecosystems alike.

Current State and Growth Trajectory

• According to a recent report, India will have more than 2,100 GCCs by March 2028, up from around 1,700 today

• The GCC market in India is projected to grow to US$99-105 billion by 2030.

• The dominant sectors remain IT-ITeS (about 49 %) + BFSI, but there’s growing contribution from healthcare, manufacturing, engineering services. 

What’s Changing: Key Trends

1. Shift from Cost to Value

Indian GCCs aren’t just “delivery centres” any more. They’re increasingly owning end-to-end product development, AI/ML, cloud engineering, cybersecurity.

2. Tech-and-Talent Transformation

The skill-stack demanded is higher: professionals need domain + tech + AI literacy.
GCCs are also embracing hybrid work, collaborative digital models, upskilling. 

3. Geography / Tier-2 Growth

While metros like Bengaluru, Hyderabad, Pune dominate, there’s increased movement into Tier-2/3 cities (Coimbatore, Indore, Bhubaneswar) — driven by cost pressure and talent dispersion.

4. Strategic Autonomy & Governance

Modern Indian GCCs are being treated as “peers” to global HQ counterparts — empowered, accountable, owning core functions rather than just support. 

Why This Matters

For companies: setting up or scaling a GCC in India means thinking not just about cost arbitrage but innovation leverage.
For talent: it opens pathways into higher value roles (product engineering, fintech, data science) beyond “support roles”.
For cities & states: it means real estate demand, employment growth, ecosystem development — but also infrastructure and policy challenges.

Challenges & Imperatives

• Skill shortage in niche digital/AI roles remains a real issue. 

• Attrition and retention are still headwinds.

• Infrastructure and cost pressures in metros push organisations to rethink location strategies.

• Cultural/operational alignment between global HQ and India-GCC needs careful management.

Actionable Recommendations

• Prioritise designing the India GCC as a Centre of Excellence (CoE) with clearly defined value-levers (innovation, product engineering, customer insight).

• Build a talent roadmap: invest in upskilling, hybrid models, local leadership development.

• Explore Tier-2/3 locations for growth/expansion, balancing cost, infrastructure and talent quality.

• Ensure governance and metrics: autonomy must come with accountability and outcome-ownership.

Conclusion

If you’re operating or advising a GCC in India, the question is no longer “How can I save cost?” but rather “How can this GCC become a strategic asset in our global value chain?” The shift is on. And for India, the transformation from back-office hub to innovation engine is real.