Latest news with #GCCs
Hans India
6 hours ago
- Business
- Hans India
The Next Frontier: India's Global Capability Centre
Over the past two decades, India has become a major destination of multinational corporations that want to establish Global Capability Centres (GCCs). These centers that were initially characterized by transactional back-office support have become advanced strategic units that have brought innovation, product development, and digital transformation to the parent organizations across the globe. Bengaluru, Hyderabad, Pune are some of the cities that have long ruled this landscape, providing deep talent pools, strong infrastructure and mature ecosystems that have drawn some of the largest enterprises in the world. The Emergence of Tier-2 and Tier-3 Cities But there is a major shift that is subtly changing the GCC story of India. More and more multinational corporations are seeking opportunities outside these Tier-1 cities and are now turning to newer urban centers in Tier-2 and Tier-3 areas. This shift is not merely a spill over of urban clogging in metros but a well-calculated move that signifies maturing requirements of international companies. The smaller cities of Coimbatore, Kochi, Indore, and Jaipur are also in focus due to their cost advantages, growing talent pools, better infrastructure, and favourable policy expertise training programs helps companies enhance their talent pool in Tier-2 cities, making them better equipped to handle the complexities of global operations. This change is a turning point in the Indian position as a world leader in service delivery. The move to Tier-2 cities holds the potential of increasing operational resilience, human capital that remains unexplored, and a more decentralized model of growth that can transform the economic geography of India. With the world of business demanding agility in the rapidly evolving world, the emerging hubs in India are set to assume the center stage in driving the next generation of GCCs. A Brief Evolution of India's Global Capability Centres: The history of GCCs in India dates back to the late 1990s when multinational corporations discovered the potential of cost arbitrage in the country. They were originally established as Global In-house Centres (GICs) and their mandate was mainly to deal with routine and non-core business processes like IT support, payroll and customer service. These centers have over time been able to handle more complex tasks and have moved up the value chain to handle software development, financial analytics and process innovation. By the mid-2010s, GCCs of India had become strategic assets to their parent organizations. They were no longer bound to transactional work but now were critical points in the global operations, innovators and creators of intellectual property. Indian GCCs are currently on the cutting-edge of providing high-value business outcomes, whether in terms of cutting-edge AI research or cybersecurity management, or product engineering. This change has entrenched India as a choice location to establish and grow GCC operations. The Shift Beyond Tier-1 Cities With Tier-1 cities in India still attracting more GCCs, they were bound to encounter the problems that come with fast urbanization. Increasing real estate prices, wage inflation, infrastructure pressure, and rising attrition rates began to chip away at some of their initial benefits. Companies started to see that their operations were concentrated in a limited number of congested urban centers, which was operationally risky, as it was demonstrated during the COVID-19 pandemic when centralized workforces were seriously disrupted. This has prompted multinational corporations to be more distributed. The lower operational costs, presence of fresh talent and the improving infrastructure in Tier-2 cities made them attractive alternatives. These cities have a 30-50% cheaper cost structure, including real estate, employee salaries, giving corporations the financial space to invest in innovation and business continuity strategies. In addition to cost benefits, Tier-2 cities have well-known universities and technical institutes that churn out high numbers of skilled graduates every year. This new source of talent is usually more stable as they have less competition in the local market and they are more connected to their hometowns and hence there is less rate of attrition as compared to Tier-1 cities where job-hopping is more common. This stability can provide organizations with a long-term benefit in workforce planning and capability building. Infrastructure Growth and Policy Support In the past, poor infrastructure in Tier-2 cities was a significant setback to multinational companies looking to expand. But this is fast changing. Urban facilities in smaller cities have been enhanced considerably due to the efforts of the Indian government, such as the Smart Cities Mission, and investment in digital and physical infrastructure. The availability of high speed internet connectivity, good power supply, improved airports, and improved road networks are now allowing businesses to establish and operate technology intensive operations beyond the metros. The role of government policies in promoting this shift is also crucial. Some state governments are providing incentives in the form of tax breaks, subsidized land and simplified regulatory frameworks to encourage foreign investment in their states. This active assistance is in line with the Indian vision of balanced regional growth and employment in the entire country. The Changing Nature of GCCs in Emerging Cities In contrast to the early predecessors of GCCs, these GCCs in Tier-2 cities are no longer back-office support units but are being designed more and more as innovation hubs. Advanced tasks such as data analytics, AI/ML model development, cybersecurity operations, and even end-to-end R&D to global markets are being taken care of by these centers. This change is an indication of a new way in which corporations perceive India not just as a place to undertake cost-efficient operations but as a partner to deliver strategic results. Multinational corporations are establishing resilient, future-ready operations that are dynamic enough to meet the needs of the global market by capitalizing on the special combination of new talent, cost advantages, and enhanced infrastructure in Tier-2 cities. Addressing Challenges in the Transition Although the opportunities look bright, there are challenges associated with spreading GCCs to Tier-2 cities. The supporting ecosystem of vendors, consulting firms and niche skill providers is less mature compared to Tier-1 hubs. This implies that corporations need to spend more on local supply chain development or collaborate with partners who have experience in these new markets. Also, although the supply of talent is abundant in quantity, it is possible that niche skills and senior professionals will have to be brought in through other large metros or be developed internally through training programs. Some smaller cities have infrastructure that is also catching up, which might be lacking in some aspects such as international air connectivity, which might influence work with international teams. These are however transition problems. With the increasing number of GCCs setting up shop in Tier-2 cities, the local ecosystems should mature, forming a positive feedback loop that will attract even more investment and talent. The Future of GCCs in India The future of GCCs in India Tier-2 cities is evidently on the rise. Analysts in the industry estimate that a large proportion of new GCC installations in the next ten years will be in these emerging hubs. With their expansion, these centers will tend to become self-sufficient innovation hubs, developing their own startup, service provider, and academic partnership ecosystems. Such decentralization does not only increase the resilience of business operations but also spreads economic growth throughout India. It has the potential to establish new urban growth centers that can compete with Tier-1 metros in terms of talent quality and sophistication of operations. The Role of Vinsys in India's GCC Evolution At Vinsys, we understand the complexities of this evolving landscape. With over 25 years of experience in training and workforce development. Vinsys a Microsoft Certified Partner help organizations prepare their teams to deliver high-value outcomes in GCC environments. Vinsys IT Services India Limited provide tailored programs in leadership, cybersecurity, cloud technologies, and emerging domains equip professionals with the skills to thrive in the global business ecosystem. As Vinsys is a trusted partner for many global accrediation bodies, ensure that your GCC teams are not only future-ready but also capable of driving transformative results. Conclusion India's Tier-2 cities are no longer peripheral to the GCC story—they are fast becoming integral to its next chapter. For multinational corporations, exploring these emerging locations offers a strategic opportunity to build cost-efficient, resilient, and innovation-driven operations.
Time of India
7 hours ago
- Business
- Time of India
Multinationals set up GCCs in India to bypass AI talent war: FT report
Non-tech multinational companies struggling to hire artificial intelligence (AI) engineers in their home countries are now turning to India. The AI talent war among tech giants such as Alphabet, Meta and OpenAI has pushed these companies, including McDonald's and UK-based insurer Bupa , to establish global capability centres (GCCs) in India, British business daily Financial Times reported. These centres, once focused on support services, are now handling functions ranging from real-time equipment monitoring to personalised customer deep and scalable AI talent pool makes it an attractive hub for such functions, Lalit Ahuja, CEO of consultancy ANSR, told FT. He noted that GCCs are becoming the 'strategic AI backbone' of many chain Tesco, for example, repurposed its GCC in 2019 to focus on AI-based solutions that cut operational costs. Sumit Mitra, CEO of Tesco Business Solutions, told FT that the Bengaluru-based centre, with nearly 5,000 employees, shifted from 'labour arbitrage' to 'intellectual arbitrage'. One of its major contributions—centralised refrigerator temperature monitoring—has saved millions of pounds annually in food having one of the world's largest pools of tech workers, India lags behind the US and China in AI innovation. GCCs could help bridge that gap by offering access to advanced resources such as large language models from global centres allow companies to keep AI development in-house, turning them into innovation hubs that can feed new technologies back into global operations, said Rohan Lobo, south Asia lead for GCCs at have moved ahead from routine support roles to high-value tasks such as agentic AI and advanced analytics, said Jaspreet Singh, head of Grant Thornton Bharat's GCC practice. However, challenges persist in limited digital and physical infrastructure outside major cities, and there is an urgent need to train and retain talent, he back office industry has grown from $11.5 billion in 2010 to $65 billion in 2023, employing 1.8 million people. Brokerage Goldman Sachs reports that research and development now makes up 55% of GCC also has an advantage in price amid the current AI talent war, which may lead to some jobs in the space being routed AI talent generally costs around 15–25% of what companies pay in global hubs such as the US, particularly for senior and research-level roles, according to AMS in the US, UK or Europe are almost five times more than the Indian average for similar skill sets, as per Teamlease Digital. For mid-level skill roles, such as machine language engineers or data scientists with experience, the salary difference is about two to three times.
Time of India
9 hours ago
- Business
- Time of India
US retail giant Costco to set up global capability centre in India
U.S. retailer Costco Wholesale Corp will open its first technology centre in India in Hyderabad , two people familiar with the plans told Reuters. The Global Capability Centre , handling technology and research operations and working alongside global teams, will initially employ 1,000 people and scale up, sources said. GCCs, which were once low-cost outsourcing hubs for global firms, have evolved over the last few years and are now used to support their parent organisations in multiple functions, including daily operations, finance, and research and development. India is already home to some of the global marquee brands--having their GCC operations in India. This includes companies such as JPMorgan Chase, Walmart and Target in Bengaluru while Hyderabad also hosts companies such as McDonald's, Heineken and Vanguard Group. The market size of India's global capability centres (GCCs) is likely to grow to $99 billion-$105 billion by 2030 from $64.6 billion in fiscal 2024, according to a report by IT industry body Nasscom and consulting firm Zinnov released late last year. Costco did not immediately respond to Reuters request for a comment.
Time of India
10 hours ago
- Business
- Time of India
India Office REITs outperform Realty Index, attract global investors: Cushman & Wakefield study
Indian office REITs are showing strong growth. They are outperforming the real estate market. Investor interest is increasing. Global Capability Centres are driving leasing demand. REIT-owned properties are capturing a bigger share of the Grade A office market. A new office REIT, Knowledge Realty Trust, is expected to launch soon. India's REIT market is among Asia's fastest growing. Tired of too many ads? Remove Ads Global capability centres power leasing momentum Tired of too many ads? Remove Ads REITs capture bigger share of India's grade A office market New listings on the horizon India among Asia's fastest growing REIT markets India's Office REITs are fast emerging as a resilient wealth-creation avenue, outperforming the broader real estate market and drawing increasing investor to Cushman & Wakefield 's latest Asia REIT Market Insight 2024–25, Indian office REITs recorded over 15% capital appreciation in the past 12 months, surpassing the performance of the BSE Realty Index, which witnessed a correction during the same study highlighted that India and China remain the key growth engines for the Asia REIT market in 2024, even as mature markets like Japan, Singapore, and Hong Kong trend towards stabilization. 'India's REIT market continues to carve a strong trajectory, with exceptional growth seen across the office sector,' said Somy Thomas, Executive Managing Director, Valuations and Co-Head, Capital Markets, India at Cushman & Wakefield.A key driver behind this robust performance has been the surging leasing demand from Global Capability Centres ( GCCs ), which increasingly prefer institutional-grade office spaces offered by REITs. According to Cushman & Wakefield, GCCs accounted for 40%–60% of total leasing demand in REIT assets, compared to their overall average of 28–29% across India's office of June 2025, India's REIT landscape comprises three office REITs and one retail REIT, collectively managing over 105 million sq ft of operational space, with plans to add another 23 million sq ft under development. REIT-owned properties now account for approximately 13% of India's total Grade A office stock, a significant jump driven by demand from multinationals, BFSI firms, and engineering Chen, Director, Investor Client Intelligence & Insights, Asia Pacific at Cushman & Wakefield, noted, 'India's performance emphasizes the growing strength of the country's institutional-grade real estate. These markets continue to create new and exciting opportunities for investors targeting Asia.'The Indian REIT market is set to grow further, with Knowledge Realty Trust, backed by Blackstone and Sattva Developers, expected to launch India's fourth office REIT by the end of 2025. With 48 million sq ft of Grade A office space, it is poised to become one of the largest REITs in India upon mature markets like Japan, Singapore, and Hong Kong are focusing on operational efficiencies amidst global monetary challenges, India stands out among Asia's emerging markets. Alongside China and Thailand, India recorded a 13% growth in its REIT market during 2024, as per Cushman & Wakefield's data. This growth is underpinned by strong economic fundamentals, increasing foreign investor interest, and rising demand for premium office spaces.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
New Indian Express
11 hours ago
- Business
- New Indian Express
Costco's India entry to spur jobs, fuel growth in tech sector
CHENNAI: The US retailer giant Costco Wholesale Corporation's plan to set up a global capability centre (GCC) in India, as reported by Reuters on Tuesday, marks its formal entry into the country's business landscape. The centre will focus on technology and research operations, working in close collaboration with the retailer's global teams. According to reports, the GCC will initially employ 1,000 professionals, with plans to scale significantly in the coming years. This move is expected to generate a meaningful impact on India's job market, particularly in the technology and services sectors, say analysts. The direct hiring of skilled professionals in areas such as software engineering, data analytics, cybersecurity, and research and development will not only provide employment opportunities but also set benchmarks for compensation and career growth in the industry, they believe. Strategic context and industry impact India has emerged as a global hotspot for GCCs, with over 1,600 centres currently operating across major cities. The sector has added more than 600,000 jobs between 2019 and 2024, and total GCC employment is projected to reach 2.8 to 4 million by 2030. Costco's decision to establish its capability centre in India aligns with a broader trend among global retailers and consumer companies seeking to leverage India's skilled workforce, cost advantages, and innovation capabilities. Retail-focused GCCs, in particular, are gaining momentum, with forecasts suggesting that India could host over 90 retail and consumer goods GCCs by 2028. These centres are increasingly evolving into strategic hubs for product development, customer experience, supply chain analytics, and AI-driven operations. Direct and indirect job gains The direct creation of 1,000 high-quality jobs by Costco is only the beginning. As the GCC expands, further employment will be generated through ancillary services such as facility management, IT infrastructure, training, and logistics. Moreover, this will drive demand for niche skill development and certifications, creating additional opportunities for educational institutions and upskilling platforms. The rise of GCCs has also raised salary benchmarks in the tech sector. Professionals in these centres often earn 20–25% more than their counterparts in traditional IT services firms, due to the focus on high-value functions and global exposure. State-level and regional benefits Indian states such as Karnataka, Tamil Nadu, and Maharashtra are actively promoting GCC investments. For example, Karnataka alone aims to create 350,000 new jobs through its GCC policy by 2029. Costco's entry could further boost such state-level initiatives, contributing to regional economic growth, infrastructure development, and talent retention. Costco's upcoming capability centre, most likely at Bangalore, is poised to deliver a strong boost to India's employment landscape, particularly in the high-skill technology and research domains. With plans to scale beyond the initial 1,000 hires, the initiative signals growing global confidence in India as a hub for innovation and operational excellence. Beyond direct job creation, the move is likely to generate wide-ranging benefits including skill development, salary growth, and support for the expanding ecosystem of global capability centres in the country.
