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Japanese enterprises have long been known for their operational excellence, commitment to quality, and long-term strategic planning. As global business environments become increasingly interconnected, many organizations are evolving their operating models to strengthen cross-border collaboration while maintaining robust governance and operational control.

One approach that is seeing growing adoption is the establishment of a Global Capability Center (GCC) in India. While GCCs were initially designed to support technology and shared services, they have since evolved into enterprise-wide hubs that deliver capabilities across finance, engineering, research, digital transformation, customer experience, procurement, and business process management.

India has become a preferred destination for this strategic expansion due to its highly skilled talent pool, well-established business ecosystem, advanced digital capabilities, and growing culture of innovation.

According to Deloitte, India is home to one of the world’s largest and fastest-expanding GCC ecosystems, with more than 1,700 centers playing a critical role in supporting global operations and driving innovation. This sustained growth continues to attract multinational enterprises looking to build scalable operational capabilities and support long-term business expansion.

This article highlights seven key reasons why Japanese enterprises are increasingly selecting India as the destination for their next Global Capability Center.

1. Access to a Highly Skilled and Diverse Talent Pool

India offers one of the world’s largest talent pools across engineering, information technology, finance, analytics, artificial intelligence, legal services, human resources, customer operations, and business process management.

For Japanese enterprises, this provides the opportunity to build multidisciplinary teams that support a wide range of global business functions from a single location.

Every year, Indian universities produce millions of graduates, while an experienced workforce continues to expand expertise across critical business domains, including:

Software engineering

Product development

Finance and accounting

Data analytics

Supply chain management

Digital marketing

Cybersecurity

Business process management

This depth and diversity of talent enables a Global Capability Center to move beyond transactional support and become a strategic hub for innovation, operational excellence, and enterprise growth.

2. Strong Government Support for Global Business Expansion

India has consistently strengthened its business environment through policies and initiatives designed to encourage foreign investment and long-term enterprise growth.

Key government initiatives include:

Expansion of digital infrastructure

Simplified business regulations

Development of industrial corridors

Special Economic Zones (SEZs)

Partnerships with the startup ecosystem

State-level incentives for technology and innovation investments

These initiatives provide multinational enterprises with a supportive environment for establishing an India GCC while enabling scalable, long-term operations.

In addition, many state governments actively partner with global organizations through investment facilitation, infrastructure development, workforce enablement, and talent development programs, making India an increasingly attractive destination for strategic business expansion.

Building the Right GCC Strategy

Establishing a Global Capability Center involves far more than selecting the right location. Long-term success depends on designing an operating model that aligns people, processes, technology, governance, and enterprise objectives.

IMS OneWorld supports organizations through strategic outsourcing advisory, helping enterprises evaluate, design, build, operate, and scale Global Capability Centers. Its advisory-led approach combines strategic planning with integrated execution across talent, operations, compliance, and technology, enabling businesses to build scalable operating models with greater visibility, control, and long-term value.

The next phase of GCC growth in India is increasingly defined by functional alignment, workforce sustainability, and long-term operating models. With more than 2,000 Global Capability Centres employing over 1.9 million professionals and contributing 31.3 million sq. ft. of office leasing in 2025, India’s GCC ecosystem continues to evolve. As the market matures, enterprises are expanding beyond established metro hubs into emerging cities that provide competitive operating costs, access to skilled talent, and greater capacity for scalable growth.

This shift reflects a more strategic approach to location selection. Rather than prioritizing cost alone, enterprises are choosing cities based on their ability to support specific business functions, talent requirements, and future expansion plans. For organizations evaluating a GCC in India in 2026, emerging cities present a compelling combination of operational readiness, workforce availability, and long-term scalability.

Why Emerging Cities Are Becoming a Strategic Choice

Emerging cities are strengthening their position within India’s GCC landscape by offering a balanced mix of cost efficiency, talent availability, and operational resilience. Compared with major metropolitan locations, many Tier II cities provide lower operating expenses while supporting stronger employee retention and reduced attrition across several functions.

The business case is also reinforced by continued infrastructure development, supportive state government policies, and the growing adoption of multi-city operating models. Together, these factors enable enterprises to diversify operations, improve business continuity, and establish GCCs with greater flexibility and sustainable long-term growth.

How Enterprises Should Evaluate an Emerging GCC City

A strong GCC in India location decision should be built around a practical evaluation framework rather than a broad Tier I versus Tier II comparison.

Enterprises should assess six factors in sequence:

1. Talent depth by function

Evaluate whether the city is stronger in BFSI operations, IT/ITES, engineering, analytics, BPM, or support services.

2. Functional adjacency

The strongest locations usually have nearby sectors, institutions, or operating ecosystems that reinforce the work being built.

3. Connectivity and leadership access

Air links, regional access, and ease of executive travel affect governance rhythm and scaling speed.

4. Workplace and campus readiness

Look for SEZs, IT parks, plug-and-play facilities, and space for phased expansion.

5. Governance and regulatory fit

Some cities are stronger for regulated finance, compliance-intensive work, or technology operations that need structured control environments.

6. Scalability over three to five years

A city should support the first build and the next operating phase, not only launch-year hiring.

Private equity-backed enterprises operate under continuous pressure to generate value at speed. Growth expectations are ambitious, operational efficiency is essential, and leadership teams are expected to scale capabilities without introducing unnecessary complexity.

For many portfolio companies, setting up a Global Capability Centre (GCC) in India has become a well-established strategy for accessing skilled talent, enhancing operating leverage, and enabling global expansion. However, as India’s GCC ecosystem continues to evolve, an increasing number of PE-backed enterprises are recognising that traditional metro cities may no longer represent the most effective route to sustainable long-term growth.

For many years, cities such as Bengaluru, Hyderabad, Pune, Chennai, and NCR led GCC expansion across India. These locations developed mature ecosystems, attracted significant multinational investment, and became synonymous with offshore delivery excellence. However, the very factors that drove their success have also introduced a new set of challenges.

As a result, forward-thinking enterprises are broadening their GCC location strategy by looking beyond metro India to unlock greater advantages in cost efficiency, talent availability, scalability, and operational resilience.

The Evolving Economics of PE-Backed GCCs in India

Private equity firms assess every investment through the lens of value creation. When portfolio companies establish delivery centres in India, the objective extends well beyond cost savings. The emphasis is on building sustainable operating leverage, developing scalable capabilities, and accelerating business performance.

This shift fundamentally changes how location decisions should be evaluated.

A decade ago, metro cities offered distinct advantages. They concentrated large talent pools, provided stronger infrastructure, and supported well-developed business ecosystems. Even today, India’s major metropolitan cities continue to dominate the GCC landscape. In 2025, GCCs accounted for more than 32.5 million sq. ft. of the approximately 80.5 million sq. ft. of gross leased office space across the country’s top seven cities, representing over 40% of total office leasing activity.

However, for PE-backed growth strategies focused on efficiency and scalability, rising operating costs, increasing competition for talent, and higher attrition rates can gradually diminish long-term returns.

In comparison, Tier-2 cities present an attractive alternative. They offer multinational organisations 10–35% savings in real estate and operational costs, while also providing access to underutilised talent pools and favourable state government incentives.

The question is no longer whether India remains a preferred destination for GCC investment. Instead, the real consideration is whether metro India continues to be the most strategic choice for the next phase of GCC expansion.

Talent Availability Is Expanding Beyond Metro Cities

One of the most notable shifts in India’s workforce landscape is the growing geographic diversification of skilled talent.

Universities, engineering colleges, business schools, and professional training institutes have expanded considerably across Tier-2 cities. This has enabled enterprises to access highly qualified professionals without relying solely on traditional metropolitan hubs for recruitment.

Cities such as Ahmedabad, Coimbatore, Indore, Jaipur, Kochi, Chandigarh, Bhubaneswar, and Vadodara are producing skilled professionals across a wide range of functions, including finance and accounting, data analytics, technology and software development, business process management, customer operations, digital marketing, and shared services.

For PE-backed enterprises establishing GCCs, this shift opens access to larger, less saturated talent markets. Instead of competing with hundreds of multinational organisations for the same workforce in metro cities, businesses can build operations in emerging locations where talent remains readily available and hiring competition is comparatively lower.

India has firmly established itself as the preferred global destination for Global Capability Centres (GCCs). This is no longer a projection or emerging trend — it is a market reality supported by scale, talent depth, and a mature ecosystem that continues to attract enterprise investment across industries and regions.

Today, more than 2,100 GCCs operate across India, with over 506 Forbes Global 2000 companies maintaining a presence in the country. GCC leasing activity recently reached an all-time high of 31 million square feet, reflecting sustained expansion. Valued at approximately $98.4 billion in FY2025–26, the sector is growing at an annual rate exceeding 11%, with new GCC establishments continuing at a strong pace.

For most enterprises, the question of “Why India?” has already been answered. The more important consideration now is whether organisations are prepared to make the strategic decisions that determine whether a GCC evolves into a long-term business advantage or falls short of its potential.

India’s GCC Advantage: What Comes Next for Enterprise Leaders

The early wave of GCCs in India was largely driven by labour cost advantages. While cost optimisation remains an important consideration, leading enterprises today increasingly view GCCs as strategic capability centres that support functions such as engineering, analytics, AI/ML, product development, finance, legal services, and research.

As GCCs become more deeply embedded in enterprise growth strategies, setup decisions take on greater significance. Operating models influence scalability, governance frameworks shape collaboration with global teams, and talent strategies ultimately determine the long-term value a GCC can deliver.

India provides access to a vast talent pool and a highly developed GCC ecosystem. The key challenge for enterprise leaders is determining how to convert that access into sustainable capabilities, innovation, and measurable business outcomes.

Understanding the GCC Setup Journey

While each GCC follows a unique trajectory, the most successful centres typically progress through a series of structured phases — from defining the business mandate and selecting the right operating model to building talent, establishing governance frameworks, and achieving operational maturity.

India offers the advantage. The right setup decisions determine the outcome.

Discover the critical factors enterprise leaders must evaluate before establishing a GCC in India — from operating models and governance to talent strategy and long-term scalability.

India’s position in the global GCC landscape has transformed significantly over the past decade. Once regarded primarily as a hub for operational support, the country has evolved into a strategic destination for capability development, innovation, and enterprise transformation.

Today, India is home to more than 2,100 GCCs operating across nearly 3,730 units, employing approximately 2.36 million professionals and contributing close to $100 billion in annual revenue. More than 500 Forbes Global 2000 companies have established GCC operations in India, reinforcing its status as one of the world’s most mature and dynamic GCC ecosystems.

This growth reflects a broader shift in enterprise priorities. While cost efficiency remains relevant, organisations increasingly value access to specialised talent, advanced digital capabilities, operational resilience, and scalable growth models.

For companies assessing global expansion opportunities, India continues to stand out as a preferred destination for GCC establishment and sustained capability development.

How GCC Mandates in India Have Transformed

The earliest GCC models were primarily focused on transactional functions and operational efficiency. Over time, organisations expanded the scope of these centres to include shared services, technology support, and broader business operations.

Today’s GCCs operate with far more strategic responsibilities. Many lead initiatives across product development, engineering, data analytics, artificial intelligence, cybersecurity, finance transformation, and enterprise-wide digital programmes.

As a result, GCCs have become integral to global operating models, playing a direct role in driving innovation, business growth, and competitive advantage.

India has emerged as a key beneficiary of this transition, supported by a strong combination of talent availability, ecosystem maturity, infrastructure advancement, and favourable policy initiatives.

Five Key Drivers Behind India’s GCC Growth

India’s emergence as a leading destination for GCC setup is underpinned by several structural strengths that continue to gain momentum. Collectively, these factors enable organisations to access high-quality talent, scale operations efficiently, accelerate innovation, and build sustainable global capabilities.

For decades, enterprises expanding globally faced a familiar choice: building local operations, outsourcing key functions, or establishing a Global Capability Centre (GCC). In 2026, that decision has become far more strategic. As talent shortages intensify, operating costs shift, and growth expectations continue to rise, the way organisations build and scale global capabilities can have a direct impact on their competitive advantage.

As a result, GCCs are no longer viewed as traditional offshore delivery centres. They have evolved into integral elements of a broader global expansion strategy, enabling enterprises to access specialised talent, strengthen business operations, accelerate digital transformation, and develop scalable capabilities across multiple regions.

However, establishing a successful GCC involves much more than choosing a location and recruiting talent. Critical decisions around operating models, governance frameworks, capability scope, leadership structures, and long-term scalability will ultimately determine whether the GCC becomes a strategic driver of growth or an additional layer of operational complexity.

5 Critical GCC Decisions Every CEO Must Make

This evolution in enterprise thinking highlights a critical reality: GCC success today is driven less by infrastructure and more by strategic decision-making. The first decision is arguably the most important.

1. Define the Strategic Purpose of the GCC

While many enterprises continue to invest in GCCs, only a limited number achieve meaningful improvements in business outcomes and operational performance. In many cases, the gap stems from a lack of strategic clarity and alignment from the outset.

A high-performing GCC must be built around a clearly defined purpose that is closely aligned with the organisation’s long-term business goals. It should not be viewed as an independent offshore operation, but as an extension of the enterprise’s strategic agenda. Before selecting a location or designing the operating model, leaders must answer several fundamental questions:

Is the primary objective to drive cost optimisation and operational efficiency?

Is the business looking to access specialised expertise or hard-to-find digital talent?

Will the GCC serve as a catalyst for innovation and digital transformation?

Is the centre expected to function as a global delivery hub for enterprise operations?

Will it play a central role in the company’s broader global expansion strategy?

The answers to these questions influence every subsequent decision — from location selection and capability transition plans to governance structures, leadership models, and performance measurement frameworks. When a GCC’s mandate is clearly aligned with enterprise priorities, organisations typically gain stronger stakeholder support, attract greater investment, and create a stronger foundation for long-term strategic value.

2. Select the Right Operating Model

Once the purpose of the GCC has been clearly established, the next step is determining how it should be structured, operated, and scaled. In 2026, organisations have access to a wide range of operating models, moving well beyond the traditional captive-centre approach.

At one end of the spectrum is the captive GCC model, where the enterprise establishes and manages the centre as a wholly owned internal operation. This approach allows the organisation to integrate the GCC deeply into its business model, culture, and long-term capability strategy.

Alternative models such as Build-Operate-Transfer (BOT) and Build-Operate-Assist (BOA) offer greater flexibility. In these arrangements, a specialist partner helps establish and manage the GCC during its initial stages. BOT models are designed with a defined transition plan that eventually transfers ownership and operations to the enterprise, while BOA models provide ongoing strategic support through a collaborative, co-managed structure.

Enterprises seeking greater speed and flexibility are also exploring GCC-as-a-Service models, where strategic partners provide dedicated talent, infrastructure, and governance frameworks without the need for immediate entity creation. At the same time, nano GCCs and micro GCCs are gaining traction as smaller, purpose-built centres focused on specific products, business functions, or regional markets. These models enable organisations to test, refine, and expand their GCC footprint through a more modular approach.

Rather than relying on a single model throughout the lifecycle of the GCC, many enterprises adopt a combination of approaches over time. The optimal structure often depends on the organisation’s growth objectives, risk tolerance, investment strategy, and desired speed to market at each stage of its GCC journey.

Ready to build a GCC that delivers long-term strategic value?

Discover the five critical decisions every CEO must make to establish, scale, and optimize a Global Capability Centre in today’s rapidly evolving business landscape.

A Global Capability Centre (GCC) is a wholly owned offshore entity established to support the core and strategic functions of global enterprises. Unlike traditional outsourcing models, GCCs provide organisations with direct operational control, ensuring alignment with corporate objectives, governance standards, and long-term business strategies. India has established itself as the leading destination for GCCs, accounting for more than 53% of the global GCC presence in 2024, with nearly 1,700 centres operating across the country. This page highlights five key strategic benefits of setting up a GCC in India.

1. Access to a Skilled and Scalable Talent Pool

India offers a vast and diverse talent ecosystem, particularly across industries such as information technology, engineering, analytics, finance, and digital services. By 2025, more than 480 mid-market GCCs in India are expected to employ over 210,000 professionals. Additionally, nearly 50% of the total GCC workforce is concentrated within just 5% of Indian GCCs, comprising approximately 88 mega centres, demonstrating the scale of operations achievable in the country.

Indian professionals are widely recognised for their technical expertise, strong communication capabilities, and adaptability to global work environments, making India a reliable hub for high-quality offshore operations.

2. Strategic Cost Efficiency Combined with Scale and Quality

Establishing a GCC in India enables organisations to achieve significant operational cost efficiencies compared to Western markets. However, the advantage extends beyond cost savings alone. Indian GCCs increasingly enhance business outcomes through the adoption of automation, process optimisation, and advanced digital capabilities.

These efficiencies allow enterprises to reinvest resources into research and development, digital transformation initiatives, and broader strategic growth plans. In 2024, India’s GCC industry generated approximately USD 64.6 billion in revenue, with forecasts suggesting the sector could surpass USD 100 billion by 2030.

3. Greater Ownership, Control, and Strategic Governance

One of the primary differences between GCCs and third-party BPO providers is operational ownership. A GCC offers organisations complete control over their processes, enabling stronger governance, better alignment with internal standards, and enhanced intellectual property protection.

This level of oversight is especially important for businesses operating in highly regulated sectors such as BFSI, healthcare, and technology. Organisations gain direct visibility into operational processes, KPIs, and compliance frameworks, supporting improved risk management and continuous performance enhancement.

4. Innovation, Digital Transformation, and Higher-Value Functions

Today’s GCCs in India have evolved far beyond transactional support functions. Many now operate as strategic innovation hubs and Centres of Excellence (CoEs), leading enterprise-wide digital transformation initiatives. Approximately 83% of Indian GCCs are investing in generative AI and other emerging technologies, while 58% have already begun adopting agentic AI capabilities.

This transformation reflects a broader shift from traditional cost-focused outsourcing to capability-driven global delivery models, positioning Indian GCCs as critical contributors to enterprise innovation strategies.

5. Global Scalability and Time-Zone Advantage

India’s time zone (GMT +5:30) enables efficient 24×7 operations and supports seamless collaboration across APAC, European, and North American markets. Organisations leveraging “follow-the-sun” delivery models benefit from faster development cycles, improved operational continuity, and enhanced customer support.

India’s mature infrastructure, supportive government policies, and well-established IT ecosystem further strengthen its position as a preferred offshore development destination. By 2030, the number of GCCs in India is projected to exceed 2,400, reflecting the country’s sustained growth and strategic importance in the global business landscape.

Discover why India continues to lead the global GCC landscape and how enterprises are leveraging scalability, innovation, and operational control to accelerate growth.

Read the full blog here and explore how IMS OneWorld enables businesses to build future-ready Global Capability Centres with tailored offshore solutions, strategic workforce support, and operational excellence.

India has long secured its role as a leading destination for Global Capability Centres (GCCs). What is now evolving is the structure of these centres — and the profile of the enterprises establishing them.

For years, the GCC landscape was dominated by large-scale delivery hubs employing thousands of professionals. Today, a new operating model is gaining momentum: smaller, highly specialised, strategically designed capability centres that are reshaping how enterprises approach innovation through outsourcing.

India’s GCC Evolution Is No Longer Driven by Scale Alone

The GCC ecosystem in India has reached a new level of maturity. The country is home to more than 1,700 Global Capability Centres, with continued expansion projected through 2030. Historically, growth discussions focused heavily on workforce scale, cost efficiencies, and concentration in major hubs such as Bengaluru, Hyderabad, and Pune.

That focus is shifting. Organisations entering the India GCC ecosystem today are prioritising different outcomes: speed of capability development, specialised expertise, and stronger operational governance. Strategic value creation has become the primary driver.

Understanding Nano GCCs

Nano GCCs are lean, purpose-built capability centres, generally operating with teams of 50 to 300 professionals. Rather than supporting large-scale, process-heavy operations, these centres are designed to deliver focused, high-impact capabilities.

In contrast to traditional GCC models, nano GCCs in India are built around clearly defined functions — such as finance transformation Centres of Excellence, dedicated automation and technology teams, or specialised compliance and risk operations. Their structure emphasises agility, governance, and measurable business impact.

Discover how Nano GCCs are reshaping enterprise outsourcing in India — from agility and governance to specialised innovation capabilities.