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Entrepreneur
21-05-2025
- Business
- Entrepreneur
More Mid-Sized GCCs Will Enter India in the Post Trump Era
The number of GCCs in India could swell up to 3,500 by 2030 and the size of the market will grow from USD 60 billion to beyond USD 110 billion in the next 5 years. You're reading Entrepreneur India, an international franchise of Entrepreneur Media. More number of mid-sized GCCs are expected to enter India in the post Donald Trump era due to factors like price rise and talent shortage that are plaguing the US economy. "When GCC came to India in early 90s, they came in quest for backend operations but soon they realised that India also has the talent to support their innovation-led R&D endeavours. So, over a period of time, they emerged and evolved as R&D units…In phase 2, they started focussing on India markets and most of them were set up keeping in mind India's talent pool and economics of operations," said Alouk Kumar, CEO, Inductus GCC, a consulting firm. "GCC 3.0 is about the post Trump era and more mid-sized GCCs will be entering India, the number swelling up to 3,500 by 2030. The size of the market will grow from USD 60 billion to beyond USD 110 billion in the next 5 years. Last year, on an average, one GCC was set up in India every week. This year, this is expected to increase to two GCCs a week which is a 100 per cent growth," Kumar told Entrepreneur India. (Alouk Kumar, CEO, Inductus GCC) Many IT service companies in India are actively establishing their own GCC units to compete on the growing trend of multinational corporations setting up their own in-house technology centers in India. For example, Infosys is said to be actively pursuing GCC-related initiatives under its Project Altius, including BOT (Build, Operate, Transfer) models and scaling support services. Similarly, Cognizant has appointed a global head of GCC services and reportedly has 10 active GCC projects. Wipro too is reportedly building a dedicated GCC service line. This is also an indication of the pressure felt by the traditional IT services companies from the GCC sector. Kumar said that a major chunk of the GCC talent comes from the IT services industry which is already a mature sector in the country. "There has been a de-growth of IT services industry. The loss of IT services industry has been a gain for GCCs," he said. Currently, GCCs contribute 1.5–2 per cent to India's GDP and it is likely to touch 3.5 per cent in 2024 according to the Economic Survey. However, Inductus believes this could touch 5 per cent after taking into account the Trump's era. Apart from the US, other major economies like Germany and Japan are also eying India to set up R&D centers. "Slow economic growth, an ageing population, and high wage structures are putting tremendous pressure on their economies and that is in turn driving the India advantage. Sector wise, IT, BFSI, healthcare, aviation, and automobile are leading the setting up of the GCCs," Kumar said. India is renowned for its deep expertise in emerging technologies such as Artificial Intelligence (AI), Machine Learning (ML), and cloud computing. With a score of 2.8, India leads the world in AI skill penetration, ahead of the US (2.2) and Germany (1.9), according to the Stanford AI Index 2024. Since 2016, India's concentration of AI talent has increased 263 per cent, making it a significant hub for AI.
Economic Times
02-05-2025
- Business
- Economic Times
US tariff tantrums delay GCC expansion as companies await clarity
The setting up of new global capability centres (GCCs) and expansion of existing ones are facing some short-term pauses and delayed decision-making – particularly in tariff-sensitive sectors like automotive – amid uncertainty over proposed US tariffs, experts tracking the space told ET.A large US-based technology firm with a GCC in Noida, which wanted to expand, has decided to wait till September before finalising plans, citing reports that the US economy has shrunk, said Alouk Kumar, CEO of Inductus, a consulting firm that advises GCCs. 'Firms across sectors like healthcare, BFSI and aviation, who had made enquiries to set up in India, have also delayed final decisions,' Kumar decision-making is particularly noticeable in tariff-sensitive sectors like automotive and integrated hardware, experts said.'But these are more tactical pauses than structural pullbacks,' said Karthik Padmanabhan, managing partner-GCC advisory at management consulting firm Zinnov. The proposed US tariffs and heightened geopolitical tensions are adding to concerns. 'While it is still early to fully assess the extent of the impact, geopolitical developments are contributing to near-term caution,' Rajesh Nambiar, president of industry body Nasscom, told impact may become more visible if uncertainties linger, experts GCCs are under pressure from their headquarters to optimise costs.'We're observing a clear directive from global HQs for Indian GCCs to optimise costs amidst economic uncertainties, not through drastic cuts but via strategic enhancements,' said Kumar of Padmanabhan said GCCs are aggressively adopting generative artificial intelligence (GenAI) and robotic process automation (RPA) to cut down effort in finance, human resources, and are also being optimised through a focus on location diversification to tier-2 and tier-3 cities and structural redesign moving towards productised pods that are leaner and deliver more, he added. Bright outlook The long-term outlook remains optimistic for India, while recruitment by GCCs is continuing as usual with no hiring freezes on the cards.'Any changes will depend on significant HQ budget cuts, making this a wait-and-watch situation,' said Arindam Sen, partner and GCC sector leader-technology, media & entertainment, and telecommunications, at EY is, however, a greater focus on critical and niche skills in AI/ML, cybersecurity, cloud, and data engineering, and on value rather than volume in hiring, said Jaspreet Singh, partner at Grant Thornton feels the ripple effects of the tariffs may even be a tailwind for India, with an uptick in digital supply chain work, nearshoring support, and product engineering mandates being shifted to India already. 'Despite concerns about Trump's pro-America policies, the Indian GCC ecosystem is unlikely to face a slowdown,' said Vikram Ahuja, cofounder of ANSR, a GCC advisory firm. 'While policy shifts may influence outsourcing trends in certain industries, the demand for AI, digital transformation and specialised talent will continue to drive US companies to leverage India's GCCs as strategic assets.' India is on track to reach 1,900 GCCs by end-2025 from 1,700 in FY24, according to estimates from in the country currently employ about 1.9 million people and generate $64.6 billion in revenues, as per industry estimates. This is projected to reach about $99-105 billion by FY2030, employing 2.5-2.8 million people.
Hans India
25-04-2025
- Business
- Hans India
Inductus Study: 120+ Mid-Sized GCCs to Create 40,000 Jobs by 2026
A new report by Inductus GCC has revealed that mid-sized Global Capability Centers (GCCs) in India are experiencing rapid growth, outpacing the broader GCC market with a compound annual growth rate (CAGR) of 6.2 per cent, compared to the market's average of 4.5 per cent. The report, titled Mid-Sized Global Corporations Establishing GCCs in India: Navigating Uncertainties with Confidence, highlights the growing role of smaller-scale centers with 200 to 1,000 employees as global companies seek specialized expertise and greater operational flexibility. The study indicates that over 120 new mid-market GCCs are expected to open in India by 2026, building on the more than 800 existing centers already employing around 220,000 professionals. The mid-sized sector is poised for a 15-20 per cent revenue growth between 2024 and 2026, underscoring the increasing importance of these centers to global companies. Notably, 65 per cent of mid-sized firms intend to ramp up their investments in these operations over the next two years, seeing them as key to driving innovation. Alouk Kumar, Founder and CEO of Inductus, commented on the findings: "Mid-sized GCCs have transformed from being cost-saving hubs to pivotal centers of innovation. Our research shows that many companies now find immense value in these smaller, more flexible operations, which offer the agility needed to quickly adapt to market demands while maintaining specialized expertise. These centers bridge the gap between boutique operations and larger-scale centers, providing a strategic advantage." The cost efficiency of these centers is a significant factor in their growth. Companies report saving 30-40 per cent in operational costs by setting up in India, compared to other global locations. These savings are being reinvested in innovation and other strategic initiatives. As of 2024, mid-market GCCs account for nearly 50 per cent of India's GCC ecosystem, a clear sign of their expanding influence. The Delhi-NCR region, especially Noida and Greater Noida, has become a hotbed for these centers, driving local economic growth through job creation, infrastructure expansion, and the development of ancillary services. Additionally, the trend of setting up in tier-2 and tier-3 cities is contributing to regional economic development and creating employment opportunities outside major metropolitan areas. The survey also reveals high adoption of transformative technologies by mid-sized GCCs. Artificial Intelligence (AI) and Machine Learning (ML) are increasingly being used for automation and predictive analytics. Over 70 per cent of these centers have adopted Cloud Computing, which supports scalability and remote work capabilities. The implementation of enhanced cybersecurity measures is also a key focus, along with the growing use of the Internet of Things (IoT) in specific sectors. Inductus remains at the forefront of providing actionable insights into the GCC sector, leveraging its extensive research capabilities and experience in the global operations landscape. The company continues to support businesses seeking to navigate the evolving dynamics of global capabilities and innovation strategies. Key Takeaways: - Mid-sized GCCs in India are growing at a rate of 6.2 per cent CAGR, exceeding the overall market's 4.5 per cent growth. - Over 120 new mid-market GCCs are expected to open in India by 2026. - These centers are key to innovation and cost efficiency for global companies. - Delhi-NCR and emerging tier-2 and tier-3 cities are becoming prime locations for GCCs. - Transformative technologies like AI, ML, and Cloud Computing are being widely adopted.
