GCCs may receive sops to set up units in tier-2 and 3 towns

The government is working on a new policy to provide incentives for setting up global capability centres, especially in tier-2 and tier-3 towns and cities, sources told ET.

The policy, being prepared by the ministry of electronics and information technology, is likely to provide incentives over and above those currently being provided by respective state governments where the GCCs are located, the sources said.

"Some states have already released and some others are working on their respective GCC policies. What we (IT ministry) propose will serve as an umbrella policy that will provide clarity on the regulations such as transfer pricing for GCCs, the stimulus that can be provided in the form of tax breaks," a senior government official said.


The new policy is also likely to encourage the setting up of large GCCs in towns and cities which can allocate dedicated office zones.

For smaller towns and cities, which are unable to offer the requisite land for large office zones, the IT ministry is also mulling incentives for setting up small GCCs, which can work in dedicated areas such as healthcare, finance and others, another official said.

Industry body Nasscom estimates that the GCC market size is expected to reach $100 billion by 2030 with a headcount of more than 2.5 million. As of fiscal 2024, GCCs in India are estimated to have a revenue of $64.6 billion and employ close to 2 million people.


Between Q1 2023 and Q4 2024, 124 new companies transacted GCC deals and took up office space for greenfield capability or R&D centres, according to Cushman & Wakefield, a global property consultancy firm.

Small and mid-sized new companies accounted for a large share of GCC transactions between Q1 2023 and Q2 2024. Over Q1 2023-Q2 2024, 55 out of the 124 new GCC companies (44% share) that transacted GCC deals had annual revenue less than $1 billion.

Apart from the incentives and tax breaks, the IT ministry's GCC policy is also expected to outline a long-term plan to encourage talent-building, including in niche areas such as generative artificial intelligence (AI) , healthcare, financial intelligence and others, one of the officials said.

Nearly 90% of domestic GCCs now operate as multi-functional entities, handling technology, operations and product engineering.

Notably, engineering, research and development (ER&D)-focused GCCs are growing 1.3 times faster than the general GCC growth rate, signifying a shift towards high-value capabilities, consulting firm Inductus said in a report released last month.

Over the next three years, over 70% of GCCs in India will integrate advanced AI capabilities, ranging from machine learning algorithms to AI-driven customer support.

About 80% of surveyed GCCs plan to invest in cybersecurity training and AI-driven threat detection over the next five years, the Inductus report said.