India’s Global Capability Centres Grow into Strategic Engines but Face Rising Trade Risks

Global Capability Centres (GCCs) in India have evolved from simple call centres and help desks into full-fledged strategic hubs for multinational corporations, but rising trade protectionism and domestic infrastructure and regulatory challenges could curtail further expansion.

Companies including Tesco, Google, Goldman Sachs and Victoria’s Secret now run large GCCs in India that perform tasks ranging from advanced data analytics and AI development to product design, finance and supply-chain planning. The centres employ about two million people and generated roughly $65 billion in revenue last year, while the number of multinationals operating GCCs in India has climbed to more than 1,700 from roughly 700 in 2010.

The shift reflects deeper capabilities available in India beyond lower labour costs. "It is the abundance of talent available across domains and not just cost savings that is driving this boom," Sumit Mitra, chief executive of Tesco Business Solutions, said in an email. Tesco’s Bengaluru campus now performs complex tasks such as vendor due diligence, demand forecasting and even designing store layouts for its outlets in the UK. The retailer plans a new distribution centre that could create as many as 15,000 jobs to support its operations with partner Tata Group.

Consulting firms and industry executives say the centres offer both "labour arbitrage" and "intellectual arbitrage" by concentrating engineering, digital and AI expertise in one location. EY projects the GCC market in India could top $100 billion by 2030, growing at an annualised rate of about 14 percent. Dhruva Advisors, a firm that assists GCCs with global tax compliance, describes these outposts as "digital twins" of parent companies that deliver core capabilities from overseas locations.

The availability of specialised talent is drawing firms that historically outsourced only routine tasks. Dan Schiappa of Arctic Wolf, a US cybersecurity company, said the availability of a tech-savvy workforce in Bengaluru and Noida enabled rapid expansion of the company's Indian centres. Companies such as Target now call their India centres "almost second headquarters," according to Lalit Ahuja of ANSR, a firm that helps set up GCCs and claims to have established one in ten such centres in India.

Growth has spread beyond major metropolitan areas. State-level incentives and lower real-estate and labour costs have encouraged multinationals to open GCCs in smaller cities and tier‑II towns. French spirits maker Pernod Ricard has opened a centre in Nashik, Maharashtra. The expansion has also buoyed the commercial property market; ANAROCK, a property consultancy, says about 31 percent of office leasing demand in India last year came from GCCs.

Despite the momentum, several constraints could slow future growth. Globally, a rising backlash against offshoring and proposals in the United States to tax or penalise companies that outsource jobs to countries such as India create uncertainty for firms that rely on international delivery models. Some lawmakers have discussed extending tariffs or other measures to areas like IT and business services, which would directly affect the GCC model.

Domestic issues also present risks. Industry leaders point to onerous compliance requirements, complex taxation rules and unresolved data-protection frameworks as obstacles to smoother operations. Rapid expansion has outpaced infrastructure development in some cities: a Financial Times report found many GCCs in Bengaluru operating without piped water and resorting to tankers to keep offices running. The federal IT ministry says it is engaging with governments in the US, Europe and elsewhere to safeguard the industry.

Operational and sovereignty concerns have emerged as GCCs take on higher-value work. Ahuja said centres that once provided support functions now drive business outcomes and generate additional revenue, shifting perceptions of where control and intellectual property reside. "That can be a threatening story to some in the current environment," he said, referring to geopolitical sensitivities around outsourcing and the location of technology development.

Policy responses, infrastructure investment and regulatory clarity will shape the next phase of GCC growth. Firms already emphasise India’s deepening AI and digital talent pool as a competitive advantage and point to state-level incentives that encourage decentralised expansion. Yet analysts caution that continued progress depends on resolving concerns about taxation, data rules and the potential for protectionist measures abroad.

The sector's trajectory suggests a pivotal juncture: GCCs are moving from cost centres to strategic engines within multinational groups, but the global political climate and domestic bottlenecks could influence whether that transformation accelerates or stalls. If India addresses regulatory and infrastructure challenges while international trade frictions moderate, the GCC market could maintain its rapid growth; if not, some multinationals may reconsider the scale and scope of their offshore investments.

For now, companies continue to expand their footprints, citing the concentration of digital, engineering and AI skills in India. How governments and businesses navigate trade policy, infrastructure gaps and regulatory complexity will determine whether India’s GCCs remain engines of global corporate strategy or face a period of retrenchment.