Government Prioritizes Growth of Global Capability Centers in India

The Indian government prioritizes the growth of global capability centers (GCCs) in the country, as they create jobs, boost the economy, and facilitate innovation. The government aims to spread GCCs to tier II and III cities and generate higher quality jobs, particularly in engineering and R&D. The Union Ministry of Electronics and Information Technology has launched a national framework for GCCs, and several states such as Tamil Nadu and Karnataka have launched their own programs to promote GCCs in tier II and III cities. The government also aims to promote innovation through AI, with a positive response to the India AI Mission's call for proposals.

The Indian government has been actively promoting the growth of Global Capability Centers (GCCs) in the country, recognizing their potential to create jobs, boost the economy, and facilitate innovation. GCCs are strategic locations where multinational corporations (MNCs) establish operations, often in tier II and III cities, to manage various aspects of their business, including R&D, IT support, and customer service. This initiative aligns with the government's broader goal of spreading economic growth and generating higher quality jobs in engineering and R&D sectors.

The Union Ministry of Electronics and Information Technology (MeitY) has launched a national framework for GCCs, which aims to streamline the process of setting up these centers and provide a supportive ecosystem. Several states, such as Tamil Nadu and Karnataka, have also launched their own programs to promote GCCs in tier II and III cities. These efforts are part of the government's broader strategy to encourage innovation and attract foreign investment.

The growth of GCCs has been significant. According to Piper Sandler analysts, India had 1,700 GCCs in FY24, up 32% from March 2019, indicating a robust growth trajectory [2]. These GCCs generated about $64.6 billion in revenue in FY24 and employed 1.9 million people, contributing significantly to the country's IT industry, which was worth $269 billion the same year [2].

The consulting firms ANSR, Gloplax, Stratinfinity, CaptiveAide, and Bridgepath Innovations have been instrumental in facilitating the establishment of GCCs. These firms help MNCs set up GCCs by providing services such as land acquisition, legal clearances, talent hiring, and operational management. ANSR, one of the largest consulting firms in this space, has established more than 150 GCCs in India and employs 150,000 people to run these centers [1]. Other firms like Gloplax and Bridgepath Innovations focus on providing consulting services without running the GCCs themselves, allowing MNCs to maintain ownership and operational control.

The government's push for GCCs is not just about economic growth but also about promoting innovation. The India AI Mission, for instance, has seen a positive response to its call for proposals, indicating a growing interest in leveraging AI for various applications [1]. This alignment between government initiatives and private sector innovations is crucial for driving the country's technological advancement.

In conclusion, the Indian government's focus on promoting GCCs is a strategic move aimed at fostering economic growth, job creation, and innovation. The support from various state governments and the active role of consulting firms are key factors driving this growth. As GCCs continue to expand, they are set to play a pivotal role in shaping India's economic landscape.

References
[1] https://economictimes.indiatimes.com/nri/study/in-touch-with-students-to-provide-support-mea-on-indian-students-f-1-visa-status/articleshow/120384734.cms
[2] https://www.livemint.com/industry/from-bengaluru-with-structure-the-boutique-firms-behind-global-gccs-11745042897513.html