Unlocking profitable growth through Global Capability Centres

With India hosting more than half of the world’s Global Capability Centres (GCCs), catering to 50+ countries through over 1,800 GCCs, India has emerged as the GCC capital of the world. This growth is driven by its vast talent base, mature ecosystem and enabling infrastructure, which power enterprise support and core functions and shape global business outcomes. India’s GCC sector currently contributes US$68 billion as direct Gross Value Added (GVA). GCCs employ more than 2.1 million talent and accounts for about 1.6 percent of the national Gross Domestic Product (GDP).

The sector is estimated to grow multi-fold over the next five years to reach over 2400 GCCs, employing 2.8 million people and accounting for over US$128 billion in GDP contribution.

Per Deloitte research, currently, three new GCCs are being set up in India every fortnight.

What is driving such exponential growth?

India has a strong and mature ecosystem comprising of an unrivalled talent pool, start-ups, academia and proactive government policies. Together, these factors drive GCC growth in the country.

India’s story is backed by its ability to provide talent for tomorrow on a large scale. With the second-largest pool of Artificial Intelligence (“AI”) talent globally and the highest AI skill penetration, India boasts a robust innovation ecosystem fuelled by a burgeoning start-up economy. With 5,800+ deep tech start-ups and 110+ unicorns, as well as a relatively stable and improving regulatory environment with dedicated GCC policies, India’s GCC sector is driving the ease of doing business and promoting investments in the country.

How GCCs are evolving into centres of strategic advantage

The journey of GCCs in India has been one of progressive transformation. From cost-focused technology and operations enablement partnership, the country is now becoming a value-focused partner, bridging front line innovation and transformation. GCCs have evolved into centres of strategic capability that are deeply embedded in core business operations, while also emerging as a sophisticated ecosystem that drives enterprise research and development, as well as market and business growth. As GCCs evolve from cost to value, scale is no longer the name of the game.

This shift has attracted over 450 mid-market GCCs that focus on value over volume, marking a move towards “GCC for All.” Impressively, 35 percent of mid-market GCCs have launched in just the last two years. This has supercharged the next wave of India’s GCC growth. Mid-market GCCs are 1.3 times more likely to be involved in transformation-focused work. GCCs hire about 1.5 times more talent in AI, cloud, cybersecurity and data science than other firms.  

Why are Private Equity firms becoming more relevant?

Many mid-market firms setting up GCCs are portfolio companies of Private Equity (PE) firms. Putting in place a GCC can exert a positive multiplier effect on the valuation of portfolio companies by enhancing operational efficiency through consolidation, driving business innovation through new-age digital product development and engineering. It can also accelerate enterprise value creation through AI-driven business models and insights.

Likewise, PE firms can unlock value from GCCs, serving as the bedrock for the efficient operations of PE firms. This can help accelerate their journey to enterprise value realisation.

PE firms can use GCCs for the following:

• Functional centralisation of core technology, corporate and business operations such as finance, Human Resources (“HR”), legal, reporting, compliance and data operations
• New capabilities build-up such as digital centre of excellence for AI/Machine Learning (“ML”), cyber, enterprise architecture, as well as emerging areas, such as market sensing, sustainability, due diligence, and Mergers and Acquisitions (“M&A”)
• Monetisation of GCCs by transforming them into revenue engines with strategic capabilities, providing service across and beyond portfolio companies to harness synergies, optimise processes and maximise efficiencies to boost enterprise value.

In a climate where digital differentiation and speed-to-market matter more than ever, GCCs are proving to be high-impact bets for forward-looking PE firms.

The road ahead

As global competition intensifies and digital transformation becomes table stakes, PE firms will continue to rely on India’s ecosystem. Many leading PE firms have started using GCCs to drive operational efficiency, scale investment support functions and unlock strategic value across their global portfolios, and the GCC model is becoming a key enabler of PE’s evolving playbook.

However, doing it right is essential, and PE firms need to take a strategic view of GCCs rather than considering them as a tactical channel for cost arbitrage. It becomes imperative to have a well-defined GCC vision and mid-to-long-term strategies with rightly calibrated business cases, operating models and means to measure the impact along the way.

India’s deep bench of digital talent and increasing push for AI-led governance offer a fertile ground for next-gen GCC models. From catalysing portfolio-wide transformation to enabling faster market entry and monetisation opportunities, India is poised to remain the global epicentre of GCC-led value creation. For PE investors seeking to future-proof their strategies, India surely offers a sandbox for reinvention.

By Keerthi Kumar, Partner, Deloitte India