GCCs making Indian IT firms irrelevant? Not exactly

• India currently houses more than 1,700 GCCs, with the numbers expected to rise to 3,000 by 2030
• Multinationals prefer India over Eastern Europe, SE Asia for its economic stability, abundant labour, and large market
• GCCs  were earlier set up for back office support; they are now highly integrated in the global supply chain
• Indian IT firms compete with GCCs for talent, but their business domains remain distinct

India’s IT industry has been widely celebrated to be the country’s biggest export success story after the economy opened up in 1991. India had a first mover advantage, a large, ambitious, abundant, skilled and adaptable talent pool that has routinely proved itself over the years. Indian IT companies have, over the years, won the trust of leading Western companies and governments, who increasingly depend on cheap labour for supplementing their daily operations. Ever since the internet has become indispensable for everyday tasks, Indian coders have proved their worth as a dominant player in the global outsourcing market. 

Indian IT companies’ business models

India’s leading IT companies, including Infosys, TCS, and Tech Mahindra, initially based their models on outsourcing, focusing on routine and repetitive tasks that initially required a lot of labour and human judgement. Western MNCs were happy to outsource these tasks to India- saving time, effort and money while providing employment to millions of Indians in the process.

Simultaneously, these multinationals realised the immense skills Indian coders had, and wanted to use them for their own benefit. Though some of them worked with these IT companies, they realised they were missing out on hiring potential skilled employees they could use themselves. After all, the IT sector doesn’t require a lot of specialised machinery- you can always set up shop at a location closest to your source of labour.

The rise of GCCs in India

That’s how Global Capability Centers (GCCs) have sprung up over the years. At first, these worked as satellite offices for the companies handling back office and IT infrastructure-related support. Even as working in IT remains the dream of every aspiring student, the glamour of working for TCS, Infosys or other corporates has waned. Instead, skilled employees now seek to work in exciting projects that can help boost their portfolios- and GCCs offer just that.

GCCs: Latest insights

In 2025, India housed 53% of all the GCCs in the world, according to property consulting firm Vestian. Out of the total 3,200 GCCs worldwide, almost 1,700 are based in Tier 1 and 2 cities like Bengaluru, Mumbai, Pune, Hyderabad and Delhi NCR. Almost all leading US and Europe-based Fortune 500 companies across industries, including retail, IT, Cloud Computing, and Pharmaceuticals, have a GCC somewhere in India.

According to a PwC India report, GCCs are expected to generate a compound annual growth rate (CAGR) of 11-12% between FY25 and FY29, even as the total number of GCCs are estimated to increase to 3,000 by 2030.

The backbone of talent for global firms

Amazon’s Hyderabad campus is its largest worldwide, housing crucial operations including customer support, operations support and technology and innovation teams dedicated for its global operations. In Febuary this year, Google opened its fourth office in India, named Ananta in Bengaluru. From the time Google launched its first office with just 5 employees in 2004, India now accounts for the largest workforce outside of the US, with over 10,000 employees spread over its offices in Bengaluru, Hyderabad, Mumbai and Noida.

Despite its challenges, many multinationals continue to prefer setting up their GCCs in India due to its abundant skilled labour, political stability and cost-efficiency. India has traditionally competed with Eastern Europe and Southeast Asia for setting up of these GCCs. 

Favouring India over other GCC destinations

Recently, there have been reports of some MNCs moving their GCCs from Eastern Europe to India, due to high employee turnover and political uncertainty. Google has been moving its software engineering and QA teams from Krakow, Poland to India while UBS and Deutsche Bank are moving their risk, compliance and tech teams to Pune, Hyderabad and Bengaluru.

Why Indian IT continues to thrive

Even though GCCs have quietly integrated India deep in the global tech supply chains, Indian IT companies continue to thrive. Though GCCs have been poaching talent from IT companies for years now, IT companies’ diversified services across domains mean they are here to stay.

For instance, Infosys’ and TCS’s Finacle and BaNCs banking suites are used for daily transactions in banks across the world, making both market leaders in providing comprehensive banking suites. Indian IT companies do work on outsourcing projects, but most of them have specialised in non-core work domains like compliance, customer support, IT support, etc, but they’ve built their in-house workflow suites based on client demand that boosts efficiency.

On the other hand, GCCs are generally more focused on the company’s core operations, where the Indian developer’s skills are used to enhance the operations while fostering innovation. They work on innovative technologies and solutions with a global audience, and help Indian innovations work for global markets. 

Though GCCs do threaten Indian outsourcers for talent, they aren’t their competitors in the clear sense, rather working towards helping the company boost its outcomes.

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