When it comes to GCCs, TN has miles to go

CHENNAI: India houses over 1,700 GCCs, employing 1.9 mn skilled professionals of India, who specialise in high-tech domains such as artificial intelligence (AI), big data, analytics, internet of things (IoTs), cybersecurity and robotics. These global capability centres (GCCs) have transformed from operational support hubs to strategic centres, forming an integral part of MNCs’ global strategies.

There has been an exponential surge of global roles in India, growing from 1,200 in 2019 to over 6,500 in 2024 with projections to be 30,000-plus by 2030. This trajectory represents a compounded annual growth rate of 39 per cent.

Interestingly, the number of women in global roles has also risen significantly, from 300 in 2019 to 1,100 in 2024 besides a projected growth of 7,500 by 2030. Over 30 per cent of global roles have moved to India while 15 per cent to tier II regions.

Shared services led the distribution of global roles in India with 37.5 per cent share this year, followed by engineering at 24.3 per cent, IT at 18 per cent, operations at 14.6 per cent and product management at 5.6 per cent. This distribution underscores the prominence of shared services and engineering in India’s global role landscape, says GCC incubator veteran MS Bala, who spearheads Chennai’s Stratinfinity. There has also been an upward shift in the number of GCCs in the last five years, 32 per cent to be precise and 60 per cent in GCC units (a single GCC having multiple units). In fact, there are 500 GCCs dedicated to AI and machine learning, indicative of the scope to do advanced cutting-edge technology work in India, he added.

Advantage Tamil Nadu

Interestingly, Karnataka has the distinction of unveiling the draft of India’s first-ever GCC policy, where it outlines a vision to establish 500 new GCCs by 2029, contributing significantly to the state’s economy and creating 3.5 lakh jobs.

But TN is not far behind, as its Minister for Finance and Human Resources Management in the Budget Speech (2024-2025), had announced: “To make Tamil Nadu as the prime destination for GCCs in India, the State will incentivise the creation of high paying jobs in new GCCS by providing a payroll subsidy of 30 per cent in the first year, 20 per cent in the second year and 10 per cent in the third year for jobs with pay above Rs 1,00,000 per month. The Government will also facilitate setting up of GCCs in Coimbatore and Madurai.” For this, Rs 2,295 crore allocation has been made to the Industries via the Investment Promotion and Commerce Department.

TN is estimated to have over 350 GCCs, including Chennai which has over 300 GCCs including World Bank, Standard Chartered, Citigroup, Barclays, Amazon, Walmart, Verizon, AstraZeneca, PayPal, and Shell and Coimbatore with 25-plus GCCs. Salem, Vellore, Madurai, Tiruchy, and Tirunelveli too have GCCs. Standard Chartered and the World Bank have their largest offices outside their headquarters in TN.

“The availability of robust, high-quality talent is TN’s unique selling point. Compared to other tech hubs, TN offers much lower operational costs at scale. Additionally, we benefit from a niche talent pool with the lowest attrition rate in the country, making it ideal for fintech companies like MX,” V Vishnu, MD-CEO, Guidance Tamil Nadu has said. The US-based MX Technologies, inaugurated its first India technology centre in Chennai in July this year.

Other notable entrants from the US include $481-mn digital automotive marketplace for car dealers and commercial partners ACV Auctions (opened a technology development centre in Chennai this year), Charles Schwabb, a global financial services major (opened in Hyderabad this August) and Shearwater, a clinical process outsourcing player (which has 5,000 people in the Philippines, opened in Chennai this month).

Working on advanced and emerging technologies, expanded strategic roles and in-sourcing low-cost GCCs are shaping the contours of the integrated global organisations or IGOs concept, says Bala. Also, private equity-funded GCCs are altering the landscape of business. The scale of deals is in the $500 million to $3 billion range.