The Indian government is preparing a new policy aimed at incentivising the establishment of Global Capability Centres (GCCs) in tier-2 and tier-3 Cities. This initiative, being crafted by the Ministry of Electronics and Information Technology (MeitY), will offer incentives beyond those provided by state governments, creating a unified framework for GCC operations.
Currently, GCCs in India are a significant driver of employment, with nearly 2 million people working in these centres. The new policy is expected to enhance this growth by offering additional support in terms of tax breaks, regulatory clarity, and land allocations, particularly for smaller towns that may not have the infrastructure for large office zones. According to a senior government official, the new policy will provide a clear structure for the operations of GCCs, including aspects like transfer pricing and tax incentives. It will also cater to both large and small GCCs, providing incentives for large centres in cities with suitable office space and smaller centres focusing on specialised areas such as healthcare, finance, and technology.
Industry body Nasscom estimates that the GCC market will reach $100 billion by 2030, with over 2.5 million people employed in these centres. The GCC sector in India is already thriving, with an expected revenue of $64.6 billion for fiscal 2024. In fact, between Q1 2023 and Q2 2024, 124 new companies set up GCCs, with a significant portion of these being small or mid-sized businesses with annual revenues under $1 billion. The policy will also focus on talent development, particularly in niche areas such as generative AI, financial intelligence, and healthcare, aligning with the growing demand for highly skilled professionals. The shift towards high-value capabilities, including AI integration, is evident, as over 70% of GCCs in India plan to adopt advanced AI technologies in the coming years. This initiative aligns with the government’s vision to create a robust infrastructure for GCCs in smaller cities, fostering innovation and providing new avenues for job creation in emerging technologies.
