Smaller cities to power India's GCC growth: FM

Finance minister Nirmala Sitharaman on Thursday said India has reached an inflection point in its Global Capability Centre (GCC) journey, shifting from being a destination driven by scale and cost efficiency to one focused on capability leadership, as she outlined the government's ambition to build an ecosystem supporting around 5,000 GCCs by 2030.

Addressing the closing session of the CII GCC Business Summit 2026, the finance minister said India currently hosts more than 2,100 GCCs, employing 2.3 million professionals and generating nearly $100 billion in annual revenues, with over 500 Forbes Global 2000 companies operating GCCs in the country.

A GCC is an offshore, fully owned facility set up by a multinational company to handle core operations, tech development and strategic business services on its own. The finance minister said India now hosts more than half of the world's GCCs. She added that while one new GCC was being established every week in 2024, the pace has accelerated to one new GCC every day on average.

"The ambition of building an ecosystem capable of supporting around 5,000 GCCs by 2030 is therefore both realistic and achievable. And this is a milestone on a much larger journey," she said.

Sitharaman said India's value proposition has evolved beyond cost arbitrage, with GCCs increasingly handling artificial intelligence (AI), engineering research and development (ERD), cybersecurity, digital platforms, product architecture, financial innovation and enterprise-wide transformation.

"Indian GCCs are assuming a growing share of global leadership mandates and strategic decision-making responsibilities. In other words, India's value proposition has evolved from cost efficiency to capability leadership," she said.

She noted that more than half of the new GCCs being established are AI-first, while ERD has emerged as one of the fastest-growing capability areas. Enterprises are now focused on maximizing innovation and strengthening long-term competitiveness rather than merely minimising costs, she added.

According to FM Sitharaman, India has emerged as a preferred destination because of its talent pool, institutions and innovation ecosystem. She described the country's GCC ecosystem as "perhaps the world's largest organized knowledge export", arguing that multinational companies increasingly rely on capabilities built in India to remain globally competitive.

The minister also stressed that the next phase of GCC growth would increasingly extend beyond established metropolitan centres into Tier-II and Tier-III cities.

She said cities such as Varanasi, Chandigarh, Visakhapatnam, Tiruchirappalli and Mysuru are developing mature innovation ecosystems alongside competitive operating costs, making them attractive destinations for future investments.

"When a GCC establishes itself in one of these cities, there is a multiplier impact," she said, adding that such investments generate demand for advanced skills, support startups, strengthen research collaborations and contribute to balanced regional development.

To support the sector, Sitharaman highlighted several measures announced in the Union Budget 2026-27, including a Unified Safe Harbour Regime for IT and IT-enabled services, enhancement of the Safe Harbour threshold from ₹300 crore to ₹2,000 crore, a fast-track Advance Pricing Agreement (APA) mechanism, continued investments in digital public infrastructure and multimodal logistics, five University Townships, and the creation of City Economic Regions (CERs) to develop globally competitive innovation hubs.

She said these initiatives are intended to reduce compliance burdens, improve policy certainty and encourage long-term investments by global enterprises.

Sitharaman said nearly two-thirds of the Fortune Global 2000 companies have yet to establish a GCC in India, presenting one of the country's largest untapped investment opportunities. She added that India also sees significant scope for attracting companies from East and West Asia, Eastern Europe, the Nordic countries and Australasia.

Sitharaman urged industry to move further up the value chain by creating intellectual property, leading frontier research, developing AI applications and expanding into emerging cities.

She also called for stronger partnerships with universities, startups, state governments and city administrations to deepen India's innovation ecosystem and strengthen the country's position in the global knowledge economy.