In recent years, India has emerged as a preferred destination for mid-size companies looking to set up Global Capability Centres (GCCs). A GCC is a strategic hub that enables companies to leverage global talent, technology, and innovation to drive business growth. India’s unique combination of skilled workforce, favorable business environment, and cost competitiveness has made it an attractive location for mid-size companies to establish their GCCs.
Why India?
India is preferred for setting up Global Capability Centres (GCCs) due to its unique combination of a large pool of skilled and educated professionals, cost competitiveness, and a business-friendly environment. The country offers a significant cost advantage compared to other countries, with savings ranging from 30% to 50% on operational costs. Additionally, India has a strong talent pool with a large number of STEM graduates, making it an attractive location for companies looking to leverage global talent. The government has also introduced various initiatives to support the growth of GCCs, such as the “Make in India” and “Digital India” programs, which provide a favorable business environment.
Several factors contribute to India’s popularity as a GCC hub:
- Talent pool: India is home to a large pool of skilled and educated professionals, with a strong presence of engineering and management graduates.
- Cost competitiveness: India offers a significant cost advantage compared to other countries, making it an attractive location for companies looking to optimize their operational costs.
- Business-friendly environment: The Indian government has introduced various initiatives to promote ease of doing business, including simplification of tax laws, relaxation of labor laws, and investment in infrastructure.
- Language proficiency: English is widely spoken in India, making it easier for international companies to communicate and operate in the country.
Benefits of Setting up a Global Capability Centre (GCC) in India
Setting up a GCC in India offers numerous benefits to companies. Some of the key advantages include:
- Access to Global Talent: India has a large pool of skilled and educated professionals, with a significant number of STEM graduates. This provides companies with access to a diverse and talented workforce.
- Improved Operational Efficiency: India offers a cost-competitive environment, with savings ranging from 30% to 50% on operational costs. This enables companies to optimize their operations and improve efficiency.
- Enhanced Innovation: India has a thriving startup ecosystem and a strong culture of innovation. This provides companies with opportunities to leverage new ideas and technologies to drive business growth.
- Scalability: India’s large and growing market provides companies with opportunities to scale their operations and expand their customer base.
- Government Support: The Indian government has introduced various initiatives to support the growth of GCCs, such as the “Make in India” and “Digital India” programs. These initiatives provide a favorable business environment and offer various incentives to companies setting up GCCs in India.
- Time Zone Advantage: India’s time zone allows for seamless collaboration with teams in the US, Europe, and other parts of the world, making it an ideal location for companies with global operations.
- Language Advantage: English is widely spoken in India, making it easier for companies to communicate and collaborate with their Indian teams.
Success stories
Several mid-size companies have already established successful GCCs in India, including:
- Dell: Dell’s GCC in Bangalore is a key hub for its global operations, providing IT services, engineering, and R&D support.
- Cisco: Cisco’s GCC in Bangalore is a major center for its global engineering and R&D activities.
- Accenture: Accenture’s GCC in Chennai provides a range of services, including IT consulting, business process outsourcing, and R&D support.
Challenges and Opportunities of Setting up a Global Capability Centre (GCC) in India
While setting up a GCC in India offers numerous benefits, it also presents some challenges and opportunities that companies need to be aware of.
Challenges:
- Cultural and Language Barriers: Although English is widely spoken in India, cultural and language barriers can still exist, particularly when communicating with teams in rural areas. Companies need to invest in cultural training and language support to overcome these barriers.
- Infrastructure and Logistics: While India has made significant progress in improving its infrastructure, there are still challenges related to transportation, power supply, and internet connectivity in some areas. Companies need to carefully evaluate the infrastructure and logistics of a location before setting up a GCC.
- Talent Retention: With a large pool of skilled professionals, there is a high demand for talent in India. Companies need to develop strategies to attract and retain top talent, such as offering competitive salaries, benefits, and career growth opportunities.
- Data Security and Intellectual Property Protection: With the increasing importance of data security and intellectual property protection, companies need to ensure that they have robust measures in place to protect their sensitive information and intellectual property.
- Regulatory Compliance: India has a complex regulatory environment, and companies need to ensure that they comply with all relevant laws and regulations, such as those related to labor, tax, and data privacy.
Opportunities:
- Growing Demand for Digital Services: There is a growing demand for digital services in India, driven by the government’s “Digital India” initiative. Companies can leverage this demand to offer innovative digital solutions and services.
- Emerging Technologies: India is at the forefront of emerging technologies such as artificial intelligence, blockchain, and the Internet of Things (IoT). Companies can leverage these technologies to drive innovation and growth.
- Diversification of Services: India offers companies the opportunity to diversify their services and move up the value chain, from traditional IT services to more complex and high-value services such as engineering, research and development, and analytics.
- Access to New Markets: India provides companies with access to new markets, both domestically and internationally. Companies can leverage India’s strategic location to expand their customer base and enter new markets.
- Government Support for Startups: The Indian government has introduced various initiatives to support startups, such as the “Startup India” program. Companies can leverage these initiatives to drive innovation and entrepreneurship.
Conclusion
India has emerged as a preferred destination for mid-size companies looking to establish GCCs. With its unique combination of talent, cost competitiveness, and business-friendly environment, India offers several benefits for companies looking to drive business growth and innovation. While there are challenges to be addressed, the opportunities offered by India as a GCC hub are significant, and companies that establish a presence in the country are likely to reap long-term benefits.
