New Delhi: A ramp-up in the number of global capability centres (GCCs) is serving India well, creating jobs at a time when IT services companies, India’s largest mass recruiter of fresher tech talent, are witnessing a slowdown, the 2024 Economic Survey said.
This will be key to driving higher contribution of GCCs to the Indian economy, with the Centre set to offer further support in the form of partnerships with foreign ventures, simplifying business, and “emphasizing data security,” said the survey released on Monday.
GCCs are offshore units set up by multinational companies to take on a range of key technology-driven tasks.
Citing data from consultancy firm PricewaterhouseCoopers (PwC), the survey stated that by 2028, India may have 2,100 companies operating GCCs—up 31% from 2023. This could double the revenue earned by GCCs in India to $90 billion by 2028.
People employed by GCCs likely to more than double in 2028
The number of people employed by GCCs is also expected to more than double to 3.4 million in 2028 from around 1.6 million in 2023.
“Today, GCCs contribute to their parent organizations’ success and propel India’s economic growth. They account for more than 1% of the country’s GDP, and the share is expected to grow further. As more global players eye India to set up their GCC operations, the government has a crucial role in facilitating their entry. Government support for identifying new business models for partnerships, simplifying the entry process, and emphasizing trust and data security, among others, will further encourage the location of GCCs in India,” the survey said.
The emphasis on GCCs comes at a time when tech hiring in India remains muted at best, leaving engineering graduates stranded without the usual mass recruiters running thin. For instance, in FY24, India’s top-five IT services firms –Tata Consultancy Services (TCS), Infosys, HCL Technologies, Wipro and Tech Mahindra — lost 4.5% of their net employee count of 1.52 million people.
The survey noted that while IT services firms are unlikely to see a further significant decline in headcount, tech jobs are unlikely to grow significantly, at least this year.
As a result, GCCs could be key in meeting the influx of fresh graduates seeking tech jobs. Most tech talent (58%) in GCCs are employed in banking, financial services and insurance (BFSI) verticals, which is also the biggest revenue driver for IT services firms.
The rise of GCCs has also led to higher-value services as part of India’s export economy. GCCs include tech operation centres run by companies headquartered abroad, which are seeing India as an attractive destination driven by ample tech talent and lower costs.
Tabled a day before the Union budget every year, the economic survey offers an overview of the domestic economy and the way forward.
