Advertisement
What really powers the cloud? Behind every Google search, A...
A lot of what defines a home isn’t visible at handover. I...
Private equity has played a significant role in shaping Indi...
Luxury real estate is one of the most talked-about segments ...
Airports play a much bigger role than just enabling travel -...
India’s global capability centre (GCC) ecosystem continues to expand rapidly, with Tier 2 cities expected to play a bigger role as companies look beyond traditional metro locations. According to the Ministry of Electronics and Information Technology (MeitY), India now hosts more than 2,100 GCCs, generating nearly USD 98.4 billion in revenue and employing 2.36 million professionals. Industry experts said lower operating costs, better employee retention and a growing talent pool are making emerging cities more attractive, although stronger technology ecosystems, infrastructure and policy support will be essential to sustain future growth.
India’s global capability centre (GCC) ecosystem is entering a new phase of expansion, with emerging Tier 2 cities expected to witness a larger share of new investments as companies increasingly explore locations beyond the country's established metropolitan hubs.
Speaking at a Confederation of Indian Industry (CII) event held recently, Rajeshwar Singh Jenwar, Director and Head of the Software Industry Promotion Division at the Ministry of Electronics and Information Technology (MeitY), said India's GCC ecosystem has recorded strong growth over the past five years.
Citing Nasscom data, he said India is now home to more than 2,100 GCCs operating over 3,700 units. These centres collectively generate nearly USD 98.4 billion in revenue and employ around 2.36 million professionals. The ecosystem has grown considerably from around 1,600 GCCs that generated USD 61 billion in revenue five years ago.
Jenwar said the figures indicate that GCC revenue has been growing at a compound annual growth rate (CAGR) of around 10%, while the number of centres, operational units and employment has expanded at a CAGR of over 6%. He said this reflects India's strengthening position as a preferred global operations base for multinational companies.
He further stated that the next phase of GCC expansion is already shifting towards emerging Tier 2 cities. Around 10% of GCC units and nearly 6% of the sector's workforce are already located in these cities. He identified Coimbatore, Ahmedabad, Chandigarh, Thiruvananthapuram and Jaipur among the emerging destinations attracting GCC investments.
According to Jenwar, strengthening the talent pipeline through reskilling and upskilling programmes will be essential to support this transition. He also said that increasing the availability of Grade A office infrastructure in Tier 2 cities, along with improving ease of doing business and regulatory compliance, will be critical in making these locations globally competitive.
The growing interest in Tier 2 cities is also expected to benefit India's commercial real estate market. Over the past few years, developers have increased investments in Grade A office developments across emerging business centres to meet rising demand from technology companies, GCCs and other knowledge-based industries. Several states have also introduced dedicated GCC policies and incentive programmes to attract investments into non-metro cities.
Industry leaders said Tier 2 cities offer several structural advantages that support long-term GCC expansion, particularly in talent availability, employee retention and operating costs.
Kiran Cherukuri, Executive Vice President and Global Head of GCC Practice at HCLTech, said talent availability has become one of the biggest challenges in Tier 1 cities. He noted that these markets are facing talent shortages, while employee attrition remains between 20% and 25%. In comparison, attrition levels in Tier 2 cities are estimated at around 10% to 12%, making them more attractive for long-term operations.
He also pointed out that real estate costs in Tier 2 cities are approximately 30% to 40% lower than those in major metropolitan markets, providing companies with a significant cost advantage while expanding their operations.
However, Cherukuri said states aiming to attract GCC investments should first focus on building a broader technology ecosystem rather than targeting GCCs alone. According to him, strengthening startup ecosystems, small and medium enterprises (SMEs), and technology service providers will create the support network required for GCCs to grow sustainably, as these sectors supply talent and services to global capability centres.
Industry experts also emphasised that sustained policy support, stronger digital infrastructure, continuous skill development and improved business-friendly regulations will play an important role in ensuring that Tier 2 cities emerge as the next major destinations for India's expanding GCC ecosystem.
Source PTI
Advertisement
Facebook
Whatsapp
