The important role of the government was highlighted in the Economic Survey
India has become the top destination for global capability centres (GCCs) in a competitive global market, according to the Economic Survey released on Monday. The survey emphasises the key role of the government in attracting multinationals to set up their GCC operations in the country. The Economic Survey lauds India’s success in the GCC region, stating that government initiatives such as identifying new business models, simplifying entry processes and emphasising on trust and data security are key in attracting more GCCs to India. Over the past few years, more than 150 multinational corporations have set up their GCCs in India, marking a significant growth from the early days of offshoring by Texas Instruments. GCCs are offshore units set up by multinationals to handle a number of strategic functions for their parent organisations. Initially focused on simple back-office functions, GCCs in India now manage some of the most complex operations across various industries. The survey highlights that GCCs contribute significantly to the success of their parent companies and India’s economic growth, accounting for over 1% of the country’s GDP. This share is expected to increase further.
India’s journey in the GCC region began with Texas Instruments setting up its office in Bengaluru in 1985. Since then, the number of GCCs in India has grown from around 760 in 2012 to over 1,600 by March 2023.GCCs in India provide custom services in operations, product development and innovation in the IT, BPO, engineering and software product development sectors. They are prominent in industries such as banking and financial services, software, telecommunications and semiconductors, with a growing presence in aerospace, automotive, oil and gas, healthcare and pharmaceuticals.The survey acknowledges the government’s role in promoting the proliferation of GCCs through strategic initiatives such as Digital India, which has streamlined online approval and licensing processes. Other supportive measures include streamlined tax regulations, flexible labour laws and a single-window clearance system for faster approvals. Improved digital infrastructure, including high-speed internet and data centres, has also benefited GCC operations. States such as Karnataka, Telangana and Tamil Nadu have been proactive in expanding the GCC landscape.
