By Arindam Sen

Copyright yourstory

Over the last few years, we’ve witnessed a fundamental shift in the global capability center (GCC) narrative. What was once viewed as a cost arbitrage model has matured into a more strategic engine, fueled by the dual forces of talent and transformation. And from where I sit, India is now central to that conversation.

The pandemic wasn’t just a temporary disruptor. In fact, it accelerated what I would call the “realignment” of global operations.

Within the first few months, companies that had previously been cautious about scaling operations remotely found confidence. And that confidence turned into conviction. The pace of GCC expansion in India not only sustained; it actually intensified.
The two non-negotiables: Talent and cost
Let me be clear—cost is still a key driver. While everyone talks about value, and rightfully so, the math doesn’t lie. When global companies draw up business cases for new GCCs, cost efficiency plays a critical role. But the other major driver, perhaps even more important today, is talent.

What we’ve seen post-pandemic is an explosion of enterprise-level technology transformation. Pre-2020, we were talking about big data and business intelligence. Then came automation, followed by generative AI, and now agentic AI.

Each of these waves has required new skill sets, new delivery models, and new thinking. Cybersecurity, too, has become a central concern. India has proven its ability to provide talent that’s not only technically sound but also adaptive to these emerging shifts.

And it’s not just tech talent. Companies are increasingly seeking sector-specific expertise—from well exploration in oil and gas to regulatory specialists in pharma. India offers depth in these verticals at a scale that few other countries can match.

While financial services have traditionally led the GCC wave, we’re now seeing mid-market banks, PE firms, CPG players, healthcare and pharma majors, and even digitally native brands setting up shop. In some quarters, you’ll see healthcare lead. In others, it’s retail. But across the board, the momentum is consistent.
Tier II cities: High potential, but cautious optimism
There’s growing curiosity around India’s Tier II and III cities. Cost-wise, they’re attractive—35-40% cheaper on average across real estate and operating costs. Locations like Coimbatore are already seeing success. Companies, both from the Big Four and traditional sectors, have set up operations there and are genuinely happy with the outcomes.

That said, the shift to Tier II is still gradual. Today, most Tier II cities act as satellite hubs, not primary centers. Companies are still evaluating if the talent depth, connectivity, and real estate infrastructure are up to the mark. For these cities to truly scale, they need proximity to strong academic institutions, better transport linkages, and consistent availability of Grade A real estate.

At EY, we’ve walked this path. We have GCC footprints in Thiruvananthapuram, Kochi, Bhubaneswar, and Kolkata, among others. These have helped us decentralize delivery while also tapping into regional talent pools.
What GCC leaders must get right
If I had to offer guidance to global leaders exploring India, especially beyond metros, I’d start with this: you need two foundational pillars in place—people and infrastructure.

People cost will make up 70% of your GCC budget; real estate and operations will take the rest. If either of these is shaky, the whole model wobbles. In addition, success hinges on calibrating leadership empowerment to the operating model.

Hybrid and fully owned GCCs outperform when leaders own talent, processes, and strategic outcomes. Moreover, parent organizations must provide clear mandates, whether the GCC is a cost-efficient executor or an innovation partner. Without this, even the best talent stalls. We’ve seen that cross-border teams thrive under leaders who blend global alignment with local agility.

Equally important are partnerships with universities, bootcamps, and state skilling missions. These play a vital role in building employable, future-ready talent. We’ve seen this first-hand in our own expansion strategy.
A word on ESG and flexibility
Many clients ask about ESG and DEI considerations. While these don’t typically drive setup decisions, they are increasingly embedded into operational models. Especially in sectors like oil and gas, pharma, or manufacturing, where ESG reporting is central, we see those values reflected in the GCC’s day-to-day activities.

And as for flexibility, the ask has evolved. Companies today aren’t just looking at co-working. They want workspace-as-a-service: branded, fully equipped offices that can scale up or down with minimal friction. This shift has been accelerated by the experience of COVID-19, where agility became essential.
Why India, why now?
Because it makes sense—strategically, financially, and operationally. India offers world-class infrastructure, a resilient socio-economic environment, and a talent pool that continues to deepen across industries.

Whether you’re building AI models, developing financial products, or setting up a regulatory compliance function, India is where it’s happening.

We often get asked how India compares with other destinations like the Philippines. And while the Philippines has long been a stronghold for transactional BPO, it hasn’t evolved at the same pace when it comes to high-value enterprise functions. India, by contrast, is driving innovation, platform ownership, and business-critical functions at scale. That’s a huge differentiator—and it’s increasingly being recognised by global boardrooms.

We’ve benchmarked against every major GCC destination, be it Eastern Europe, Latin America, and Southeast Asia; India continues to lead on most fronts. That’s not a theory. That’s what the data and the experience of dozens of global companies tell us.

This article is excerpted from YourStory’s latest report, ‘Building Tomorrow’s GCCs’.
(Click here to download the report)