3 minute read 8 Jun 2023
India's GCC industry to US$110b by year 2030

How India is gearing up for a US$110b GCC industry by 2030

By Arindam Sen

EY India Global Business Services & Operations Partner

Seasoned technology executive with rich experience in digital transformation. Leader in setting up GCCs. Enjoys playing badminton, drums and composing electronic music.

3 minute read 8 Jun 2023

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  • Future of GCCs in India - A vision 2030

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The outlook of the GCC industry remains buoyant as companies look to set-up their GCCs in India.

In brief

  • The rise of GCCs has helped to establish India as a key player in the global IT and business services industry.
  • GCCs are expanding their operations across different cities, exploring new areas of service, and hiring talent with niche skill sets.

While the global economy faces headwinds from the tightening monetary policy cycle, slowing growth and rising inflation, India has enough tailwinds with political stability, a healthy domestic consumption-based economy, and a robust regulatory system for the financial sector1 . In this context, Global Capability Centres (GCCs) continue to play a pivotal role for multinational corporations, as they strive to become centers of excellence for innovation and driving digital mindsets.

As per EY’s latest Future of GCCs in India - a vision 2030’ report, it is estimated that the domestic GCC market size will reach US$110b by the year 2030, led by software exports, which remains a key component of India's service exports. It is predicted that by 2030, India will have 2400 GCCs and that number can potentially increase to 2550 as India emerges as the world's technology and services hub. The total number of new GCC set-ups every year can jump up to 115 (from the current 70). 

Vision 2030: GCC trend analysis

Primary factors contributing to GCC market size expansion

1.  Increase in software exports services

Having an India-based GCC is no longer considered a mere labor arbitrage move, but a must for digital transformation, innovation, and value-added operations. As a result, multinational corporations across the globe are looking at India as a prime location to establish or expand their operations. One of the key drivers for this growth includes software exports, which remain a key component of India's service exports, with offshoring services seeing continued growth.

2. Tier 2 cities catching the attention of GCCs

The report suggests that by 2030, the overall number of new GCC establishments each year could reach 115 from the current 70. While Bengaluru, Hyderabad, Chennai, Mumbai, Pune, and Delhi NCR remain popular sites for GCC establishments in India, tier-II cities are also grabbing the interest of GCC leaders. Cities such as Visakhapatnam, Jaipur, Vadodara, Kochi, Chandigarh are becoming popular for new set-ups owing to its improving infrastructure, favorable state policies, and lower real estate and talent costs. Coimbatore in particular is emerging as the next big GCC hub post Chennai in Tamil Nadu.

3.  Collaboration with a thriving start-up ecosystem

India is the world's third largest ecosystem for start-ups2. In this backdrop, it provides an opportunity for GCCs and start-ups to collaborate, accelerating the entire innovation journey. While start-ups benefit from market access, enterprise connect, mentoring, funding, and data, GCCs receive technology with due diligence, speedier go-to-market, accelerated innovation, and tech-driven talent.

4.  The growth in GCC talent pool

India is one of the top tech talent markets globally3. It is no surprise then that by 2030, the GCC industry is expected to comprise over 4.5 million people, compared to the current base of ~1.9 million. As talent remains a competitive advantage, organizations must invest in their organizational culture and improve their employee value proposition.

Also, GCCs’ rising overall cost per FTE4, from the current level of US$29,100 to US$37,760 by 2030. GCCs are expanding their services with a focus on innovation and knowledge-based capabilities, leading to increased costs. The focus now is on balancing high costs with value delivered, especially in dynamic economic conditions.

The top GCC trends for the year include:

  • Establishment of Centres of Excellence (CoEs) in areas such as artificial intelligence (AI), cloud computing, engineering, data analytics, and cybersecurity
  • Transitioning from a 'cost centre' to a 'profit center,' with a focus on generating additional revenue streams
  • Expansion of functions in areas such as legal, marketing, and procurement with increased investments
  • Greater emphasis on Employee Value Proposition (EVP) to supplement key areas of focus such as organizational culture, nature of work, rewards and compensation

Participating in the EY GCC Awards 2023 platform can offer several benefits to the GCCs across India.

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With the increasing number of global leadership roles based in India, GCCs will continue to move up the value chain through innovation, product development and digital transformation.

About this article

By Arindam Sen

EY India Global Business Services & Operations Partner

Seasoned technology executive with rich experience in digital transformation. Leader in setting up GCCs. Enjoys playing badminton, drums and composing electronic music.