Union Budget 2025 Recognizes Global Capability Centres as Key Economic Drivers

Global Capability Centres (GCCs) are rapidly becoming a cornerstone of India’s commercial real estate and economic landscape. With multinational companies (MNCs) aggressively expanding their footprints, GCCs are no longer just back-end operations but emerging as strategic innovation hubs. According to a CBRE report, GCCs contributed nearly 45% of total office space absorption in Q1 2025, marking a 66% increase compared to the previous year.

This significant uptick is driven by the global shift towards digitization and the pursuit of high-value capabilities. India’s talent-rich environment and evolving infrastructure position GCCs as essential growth engines.

What’s Fueling the Rise of GCCs in India?

1. Rich Talent Ecosystem: “India produces more than 1.5 million engineering graduates every year — a treasure trove of tech-savvy professionals,” says Sparsh Khandelwal, founder and CEO of a flex-space platform. This enormous talent base allows MNCs to innovate at scale and retain competitive agility.
2. Competitive Operational Costs: While cost efficiency remains a factor, the focus has expanded beyond mere savings. Organizations are leveraging India’s ecosystem to build high-value services, making operations leaner, smarter, and more impactful.
3. Strategic Urban Hubs: Indian cities like Bangalore have transformed into global innovation zones, with deep specialization in domains like AI, cybersecurity, and financial technology. MNCs are now establishing strategic command centres, not just outsourcing operations.
4. Gateway to Asia-Pacific: With Asia-Pacific projected to drive global economic growth, GCCs based in India and neighbouring regions provide real-time market insights, faster response cycles, and agile customer servicing — essential for businesses aiming to expand their global influence.

From Policy to Platform: What Makes India GCC-Ready

• Government Backing: India’s proactive stance has been a game-changer. Incentives such as tax breaks, liberal FDI norms, and dedicated Special Economic Zones (SEZs) have made the country a preferred choice for setting up GCCs. “India already houses over 1,600 GCCs, contributing nearly $46 billion in revenues,” notes Khandelwal, citing a 2024 EY report.
• Tech Ecosystem Strength: With tech-forward cities like Hyderabad and Bengaluru, the country offers a strong digital backbone. GCCs benefit from this ecosystem by supporting cloud computing, cybersecurity, AI, and software engineering operations.
• Scalability with Ease: India’s flexible workforce and adaptable business environment enable MNCs to scale their GCCs based on evolving business demands without compromising speed or quality.

Beyond Metros: Tier-II Cities Gain Momentum

Shishir Baijal, Chairman and MD at Knight Frank India, highlights a key development: “The Union Budget 2025 proposes a national-level framework to help states promote GCCs in Tier-II cities.” This includes enhancing infrastructure, amending building laws, and fostering collaboration between industry and government.

Such initiatives tap into untapped talent across smaller cities, fostering inclusive growth and regional economic development.

Chandan Barve, VP and Chief Admin Officer at a real estate finance firm, echoes this sentiment: “By supporting GCCs in emerging cities, the government is creating new pathways for youth employment and corporate innovation, strengthening India’s global tech and service delivery leader position.”

Beyond Cost Savings: The GCC Advantage

• Talent Access: Taps into diverse global skills.
• Process Efficiency: Streamlines operations and reduces costs.
• Innovation Hub: Enables the development of cutting-edge products and solutions.
• Global Expansion: Serves as a launchpad for MNCs to scale across geographies.

Final Thoughts

India’s GCC ecosystem is rapidly maturing from an outsourcing model to a value-driven, innovation-centric approach. With government support, deep talent pools, and strong infrastructure, the country is poised to become the world’s preferred destination for Global Capability Centres — a move that’s already redefining commercial real estate and setting the stage for long-term economic growth.