Emerging Trends Reshaping GCCs in 2024

The landscape of GCCs in India is evolving rapidly, highlighting the country's integral role in the global business and technology sphere. The trends shaping the GCC sector in India in 2024 are multifaceted, reflecting a shift toward more strategic and innovation-driven operations. Here's a summary of the key trends:

Expanding Beyond Tier 1 Cities >

Innovation and Business Alignment >

GCCs Become Hotbeds for New and Disruptive Technology >

Favourable Government Policies and Support >

Expanding Beyond Tier 1 Cities

There's a growing trend of GCCs establishing operations in Tier 2 cities, driven by the availability of skilled talent and supportive government policies. While Bengaluru, Delhi National Capital Region (NCR), Chennai, Hyderabad, Kolkata, Mumbai and Pune are recognised as India's premier and well-developed technology centres, Tier 2 cities such as Ahmedabad, Coimbatore, Chandigarh, Nashik, Vadodara, Vishakapatnam, Cochin, Tirunelveli, Bhubaneswar, Thiruvananthapuram, Kolkata and Mahbubnagar boast flourishing tech industries and host a wide array of both local and global companies, marking them as established leaders in the nation's technological landscape. This decentralisation aims to tap into the vast talent pool across the country, further boosting innovation and operational efficiency. Tier 2 cities in India are emerging as new hubs for technology and innovation, driven by the expanding presence of GCCs. These cities offer a blend of talent, infrastructure and cost advantages, making them attractive locations for GCC expansion.

Innovation and Business Alignment

GCCs in India have evolved from being mere cost-saving centres to playing a crucial role in innovation, digital transformation and strategic business alignment. These centres are involved in more complex operations across the value chain, driving operational excellence, product development and becoming hubs of innovation. The shift is towards leveraging India's GCCs for their ability to quickly adapt to business priorities, ensure speed-to-market with digital technologies and align closely with the company's culture and business needs. Some examples and initiatives illustrating this evolution:

New-Age Service Integration

GCCs in India are not just about technology enablement but are also integrating niche, end-to-end activities across the value chain, including procurement, sales enablement, and environmental, social and governance (ESG) services. This demonstrates a shift from back-office functions to providing comprehensive solutions that are strategically aligned with business goals.

Digital Skills and Delivery

A significant portion of India-based GCCs are now acting as global hubs for digital skills and delivery, directly contributing to their parent organisations' digital strategies. These GCCs act as incubation engines with structured ideation processes, indicating a deeper involvement in the parent company's innovation life cycle.

Transformational Hubs

The GCCs in India are transcending the traditional scope of services and are pioneering organisation-wide initiatives that drive business and technological transformation. They are delving into new markets and managing value-added operations critical to global growth, reflecting their capacity to adapt swiftly to business needs while also aligning with corporate culture.

GCCs Emerge as Hubs for New and Disruptive Technology

GCCs are at the forefront of technology disruption, leveraging generative AI, data analytics and automation to innovate in various domains. The emphasis is on using these technologies to create intelligent solutions that streamline operations and enhance business processes. Generative AI is spearheading the technological disruption within GCCs, with around 40% of these Centers planning to explore its use cases. The applications range from intelligent chatbots to streamlined vendor portals, among other innovative solutions, marking 2024 as a year of wide-scale technology disruption facilitated by GCCs.

Digital Talent

There's a significant emphasis on acquiring digital talent within GCCs, with a focus on nurturing a workforce adept in emerging technologies. This is in line with the trend of GCCs acting as incubation engines for new ideas and digital transformation strategies. The tech industry in India currently employs over 1.94 million digital tech professionals. Digital Tech talent comprises the talent employed in technologies such as AI and natural language processing, big data analytics, IoT, cloud computing, cyber security, RPA, blockchain, AR/VR, 3D printing, quantum computing, robotics and 5G, as well as professionals employed in web and mobile development technologies.

The share of digital talent for the top cities is listed below:
City	Share of Digital Talent
Bengaluru	25-26%
Mumbai	15-16%
Delhi NCR	14-15%
Hyderabad	13-14%
Chennai	9-10%
Pune	9-10%
Source: NASSCOM; from the digital talent pool of 1.94 million

Favourable Government Policies and Support for GCCs

The Indian government's supportive policies for foreign investment, including tax incentives and initiatives in special economic zones (SEZs), have made India an attractive destination for setting up GCCs. These policies aim to promote innovation, research and development – further incentivising global companies to establish their capability centres in India. Some states in India are implementing a multifaceted strategy to attract GCCs, leveraging sector-specific policy interventions, nurturing high-end talent and cultivating a research-oriented ecosystem.

Some of these states and their policies are mentioned below:
Government Policies	Provisions/Incentives
Karnataka IT Policy 2020 - 2025	Key Provisions: Turnover linked incentives, workforce incentives, promote innovation and encourage growth of upcoming industries by promoting investment, global alliances, R&D support and IP creation. Skill Development: YUVA YUGA scheme has been designed for reskilling and skill upgradation of workforce which is affected by the change and evolution in technology
Tamil Nadu ICT Policy 2018 - 2023	Key Provisions: Land Subsidy, IT Park incentive, FSI, stamp duty incentives, power subsidy, Open Space Reservation (OSR) provisions for SEZ Skill Development: The Government of Tamil Nadu has instituted the ICT Academy of Tamil Nadu (ICTACT). The Government will also provide skill development to meet the expectations of the Tech sector.
Telangana ICT Policy 2021 - 2026	Key Provisions: Land Subsidy, IT Park incentive, industrial power tariff and workforce incentive Skill Development: Telangana Academy for Skill and Knowledge (TASK) is an initiative launched by the Institute for Electronic Governance (IEG) under the Department of Information Technology and Electronics (IT&E) of the Government of Telangana. The primary objective of TASK is to facilitate collaboration and interaction among industry, educational institutions and the government.
Maharashtra IT & ITeS Policy 2023-28	Key Provisions: Mixed land use, rental subsidy, battery recycling, grant more Flexible Floor Space Index (FSI) Skill Development Incentives for AI, ML and analytics courses. Joint programs with IIT Bombay and NITIE
Gujarat International Finance Tec-City (GIFT City), Gandhinagar, Gujarat	Key Provisions: 100% tax exemption for 10 consecutive years out of 15 years, no GST on transactions carried out in IFSC exchanges, exemption from STT, CTT, stamp duty in respect of transactions carried out on IFSC exchanges, no GST on services received by unit in IFSC It also offers highly competitive operational costs, a favourable tax regime, single-window clearance, relaxed company law provisions, and an international arbitration centre, all of which facilitate ease of doing business. Additionally, GIFT IFSC is now transitioning towards a unified regulatory mechanism. Skill Development: Deakin University has established its first international branch campus in GIFT City. Deakin graduates will be equipped for emerging and in-demand roles within India's growth sectors. University of Wollongong (UOW), has also set up a campus in GIFT City with programs focusing on FinTech, computing and data analytics.
UP IT & ITeS Policy 2022 - 2027	Key Provisions: Land Subsidy, workforce incentive, IT Park incentive, Flexible Floor Space Index (FSI) norms applicability, financial support in the form of reimbursement (covering capital and operational expenditure) of 50% of the eligible R&D expenditure. Skill Development: Collaboration with IIT Kanpur, IIT BHU, IIIT Prayagraj