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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.
Time of India
02-05-2025
- Business
- Time of India
GCC expansion facing delays amid tariff, geopolitical uncertainties
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. #Pahalgam Terrorist Attack Nuclear Power! How India and Pakistan's arsenals stack up Does America have a plan to capture Pakistan's nuclear weapons? Airspace blockade: India plots a flight path to skip Pakistan 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 said. Delayed 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. Live Events The proposed US tariffs and heightened geopolitical tensions are adding to concerns. Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories '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 ET. The impact may become more visible if uncertainties linger, experts said. Existing 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 Inductus. Zinnov's Padmanabhan said GCCs are aggressively adopting generative artificial intelligence (GenAI) and robotic process automation (RPA) to cut down effort in finance, human resources, and operations. Costs 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 India. There 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 Bharat. Padmanabhan 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 Zinnov. GCCs 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.
