Geopolitical Shifts Enhance Resilience of Indian Global Capability Centers

Experts suggest geopolitical changes offer opportunities for GCCs in India to adapt.

Experts at The Hindu Tech Summit 2026 discussed how global disruptions caused by geopolitical developments could help Global Capability Centers (GCCs) in India build resilience. Speakers noted that changes in global visa rules and data flow restrictions have forced companies and GCCs to adapt. Harsha Ram G.

mentioned the rapid scaling up of GCCs in India and the establishment of new ones, with 1,900 GCCs across the country. Deepak Kota highlighted the shift towards driving value and bringing critical capabilities to India. Kalilur Rahman noted India's transformation in medical research, with 45% of innovative research conducted in pharma GCCs.

Santhosh Kumar M. emphasized the importance of considering behavioral challenges when adopting technologies. John Xavier moderated the session.

Key Facts

Geopolitical changes are helping GCCs in India build resilience.

Global visa rules and data flow restrictions are affecting talent mobility and data flow.

GCCs are transforming to carry out a large part of the core functions of parent companies.

There are 1,900 GCCs across India.

Many GCCs are now focused on driving value and bringing back more critical capabilities.

India has transformed from being an 'order taker' to being the pharma of the world.

UPSC Exam Angles

GS Paper 2 - International Relations and its impact on the Indian economy

GS Paper 3 - Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment

Potential question types: Statement-based MCQs, analytical questions on the role of GCCs in India's economic growth

Visual Insights

Key Statistics on GCCs in India

Highlights the growth and importance of Global Capability Centers in India, as discussed at The Hindu Tech Summit 2026.

Number of GCCs in India: 1,900
Innovative Research in Pharma GCCs: 45%

More Information

Background

The rise of Global Capability Centers (GCCs) in India is linked to the broader trend of globalization and the outsourcing of business processes. The concept of outsourcing gained prominence in the late 20th century as companies sought to reduce costs and improve efficiency. This led to the establishment of offshore centers in countries like India, which offered a large pool of skilled labor at competitive wages. The Liberalization, Privatization, and Globalization (LPG) reforms of 1991 played a crucial role in opening up the Indian economy and attracting foreign investment, which facilitated the growth of the IT and ITES sectors. Over time, GCCs have evolved from performing basic back-office functions to handling more complex and strategic activities. This evolution has been driven by advancements in technology, increasing availability of skilled talent, and the growing need for companies to innovate and stay competitive. The establishment of Special Economic Zones (SEZs) and the implementation of favorable policies by the Indian government have further boosted the growth of GCCs. The Information Technology Act, 2000 provided the legal framework for e-commerce and digital transactions, which was essential for the growth of the IT and ITES industry. The current legal and constitutional framework in India supports the operation and growth of GCCs. The Constitution of India guarantees fundamental rights, including the right to equality and the right to freedom of profession, which are essential for creating a conducive business environment. Various labor laws and regulations govern the employment of workers in GCCs. The Ministry of Electronics and Information Technology (MeitY) plays a key role in formulating policies and promoting the growth of the IT and ITES sector. The Goods and Services Tax (GST) has simplified the indirect tax regime and reduced the compliance burden for businesses, including GCCs.

Latest Developments

Recent government initiatives have focused on promoting innovation and research and development (R&D) in India. The Atal Innovation Mission (AIM) and the Startup India initiative aim to foster a culture of innovation and entrepreneurship. These initiatives provide funding, mentorship, and incubation support to startups and innovators. The government has also launched various schemes to promote digital literacy and skill development, such as the Pradhan Mantri Kaushal Vikas Yojana (PMKVY), which aims to train and upskill the workforce to meet the demands of the IT and ITES industry. There are ongoing debates about the impact of automation and artificial intelligence (AI) on the workforce in GCCs. Some experts believe that automation will lead to job losses, while others argue that it will create new opportunities and enhance productivity. The need for reskilling and upskilling the workforce to adapt to the changing technological landscape is widely recognized. Institutions like NASSCOM are playing a key role in promoting skill development and fostering collaboration between industry and academia. The future outlook for GCCs in India is positive, with expectations of continued growth and expansion. The government has set ambitious targets for increasing the contribution of the IT and ITES sector to the Indian economy. The focus is on attracting more foreign investment, promoting innovation, and creating a favorable regulatory environment. The increasing adoption of digital technologies and the growing demand for skilled talent are expected to drive the growth of GCCs in the coming years. The government's emphasis on ease of doing business and reducing compliance burden is also expected to benefit GCCs.

Frequently Asked Questions

1. What are Global Capability Centers (GCCs), and why are they important for India's economy?

Global Capability Centers (GCCs) are offshore units established by multinational corporations to perform specific business functions. They are important for India's economy because they drive value, bring critical capabilities, and contribute to research and development.

2. How might geopolitical shifts, such as changes in global visa rules and data flow restrictions, affect the operations of GCCs in India?

Geopolitical shifts like changes in global visa rules and data flow restrictions can impact talent mobility and data flow, forcing GCCs to adapt and build resilience. These changes can also push GCCs to drive more value and bring critical capabilities to India.

3. What is the approximate number of GCCs currently operating in India, and what percentage of innovative medical research is conducted in pharma GCCs?

There are approximately 1,900 GCCs operating across India. Pharma GCCs in India conduct about 45% of innovative medical research.

4. What are the potential benefits and drawbacks of India becoming a hub for Global Capability Centers (GCCs)?

Potential benefits include economic growth, job creation, and increased R&D activities. Drawbacks might include over-reliance on foreign investment and potential vulnerability to global economic downturns. It is important to consider behavioral challenges when adopting technologies.

5. How are recent government initiatives like the Atal Innovation Mission (AIM) and Startup India related to the growth and development of GCCs in India?

Government initiatives focused on promoting innovation and R&D, such as the Atal Innovation Mission (AIM) and Startup India, foster a culture of innovation and entrepreneurship. These initiatives provide funding, mentorship, and incubation support, which can indirectly benefit GCCs by enhancing the overall innovation ecosystem in India.

6. What key areas should India focus on to further enhance the resilience of its Global Capability Centers (GCCs) in the face of global disruptions?

India should focus on strengthening its data protection framework, promoting skill development in emerging technologies, and fostering greater collaboration between academia and industry. Addressing behavioral challenges related to technology adoption is also crucial.

Practice Questions (MCQs)

1. Consider the following statements regarding Global Capability Centers (GCCs) in India: 1. GCCs primarily focus on providing basic customer service and support functions. 2. The growth of GCCs in India has been facilitated by favorable government policies and a skilled workforce. 3. Geopolitical disruptions have had no impact on the resilience of GCCs in India. Which of the statements given above is/are correct?

A.1 only
B.2 only
C.1 and 3 only
D.2 and 3 only

Show Answer

Answer: B

Statement 1 is INCORRECT: GCCs have evolved to handle more complex and strategic activities beyond basic customer service. Statement 2 is CORRECT: Favorable government policies, such as SEZs and the Information Technology Act, along with a skilled workforce, have facilitated the growth of GCCs in India. Statement 3 is INCORRECT: Geopolitical disruptions, such as changes in visa rules and data flow restrictions, have forced companies and GCCs to adapt, thereby enhancing their resilience. The news summary mentions experts discussing how geopolitical developments could help GCCs in India build resilience.

2. Which of the following sectors has seen significant innovative research conducted in pharma Global Capability Centers (GCCs) in India, according to the information provided?

A.Agriculture
B.Medical research
C.Space technology
D.Nuclear energy

Show Answer

Answer: B

According to the news summary, Kalilur Rahman noted India's transformation in medical research, with 45% of innovative research conducted in pharma GCCs. Therefore, the correct answer is medical research.

3. Consider the following statements: I: Global Capability Centers (GCCs) in India are primarily driven by cost arbitrage. II: Geopolitical factors can influence the resilience and adaptability of GCCs. III: The number of GCCs in India is approximately 1,900. Which of the statements given above is/are correct?

A.I and II only
B.II and III only
C.I and III only
D.I, II and III

Show Answer

Answer: B

Statement I is incorrect. While cost arbitrage was a primary driver initially, GCCs are increasingly focused on driving value and bringing critical capabilities to India. Statement II is correct. Geopolitical factors like visa rules and data flow restrictions can impact GCCs. Statement III is correct. The news summary mentions that there are 1,900 GCCs across the country.