Government eyes strategic growth for India's Global Capability Centers

New Delhi [India], 14 July (India): The Indian government is working on comprehensive policy interventions to further accelerate the growth of Global Capability Centers (GCCs) in the country, with over 1,800 such centers currently operational, a senior government official said on Monday.

Speaking at a Confederation of Indian Industry (CII) GCC Business Summit, Anuradha Sharma, Secretary, Department of Economic Affairs, Ministry of Finance outlined key policy imperatives that could help the sector achieve its next phase of growth, emphasizing the need for "exact action points" and collaborative efforts between government and industry.

Sharma highlighted how India has emerged as one of the world's largest GCC destinations. The journey from Business Process Outsourcing (BPO) to captive centres to today's Global Capability Centres (GCC) reflects the sector's transformation into a "huge engine of revenue, growth, and employment."

"The scale and range of services that GCCs are now engaging with - product development, operations, BPO, engineering, software - shows the diverse growth trajectory," Sharma noted, emphasising the sector's contribution of 1.8% to India's total gross value added.

The secretary said that strong physical and digital infrastructure, supported by strategic initiatives like Digital India and ease of doing business reforms over the past decade, have created a conducive environment.

Specific policies by states like Karnataka, Tamil Nadu, and Telangana in physical and digital infrastructure development have enabled GCC clustering in these regions.

India's talent pool remains a critical competitive advantage, with approximately 2.1 million STEM graduates entering the workforce annually. The diverse workforce shows over 35% women participation with a median age of 28 years, providing what Sharma called "fertile ground" for GCC expansion.

However, she noted challenges in GCC participation in national programs, citing limited engagement in the PM Internship Scheme and calling for faster decision-making processes to leverage such "win-win" opportunities.

Sharma said that while GCCs are concentrated in 3-4 major centres, there's potential for expansion to tier-2 cities and states with abundant talent but fewer GCC operations.

Moving beyond traditional business functions to engineering R&D, AI, and emerging technologies requires specialised skills development.

Sharma said that with GCC expansion beyond US companies to other countries, India needs enhanced outreach strategies to attract global players.

Sharma emphasised the need for a comprehensive framework involving dialogue between the Centre and state governments to promote the geographic spread of GCCs. "What are those things that we need to create? What is the framework that is needed?" she asked, highlighting the importance of leveraging states with talent resources but limited GCC presence.

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