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Business Standard
09-07-2025
- Business
- Business Standard
Global capability centres not packing bags just yet for small-town India
The Indian government wants global capability centres (GCCs) to look beyond Bengaluru, Hyderabad, and Chennai, and expand into Tier-II and Tier-III cities. But that shift won't happen anytime soon, say industry executives, citing weak infrastructure, inadequate talent availability, and an ecosystem that's still developing. That ecosystem will only solidify once service companies build a critical mass in cities like Ahmedabad, Indore, Mysuru, Coimbatore, Mohali, or Bhubaneswar, followed by an influx of startups. While firms such as Tata Consultancy Services, Infosys, Cognizant, and Wipro have set up delivery centres in these cities over the years, the startup landscape remains early-stage. As announced in the Union Budget, the government is likely to soon roll out a framework to guide states in establishing GCCs, especially in smaller cities. The guidelines will include suggestions for improving talent availability, infrastructure, by-law reforms, and industry collaboration mechanisms. Tamil Nadu and Karnataka already have policies and processes that can help firms set up technology (tech) centres in different parts of the state. 'GCCs exist not in silos but in an ecosystem,' said Sangeeta Gupta, senior vice-president and chief strategy officer at Nasscom. 'You need to get service companies in, you need to energise the startup ecosystem, and only then do GCCs make sense. They can't exist in isolation.' That holds for engineering talent considering a return to their hometowns in smaller cities. Without a strong company presence, switching jobs for better opportunities may still require moving back to the metros. Arindam Sen, partner and GCC sector leader — tech, media and entertainment, and telecommunications at EY, said that while states are promoting smaller cities, they're also expanding their major ones, making companies hesitant to commit elsewhere. 'Most still aren't biting the bullet, apart from a handful of cities. Connectivity is another issue — double- or triple-hop flights or long layovers are common. Smaller cities need much stronger promotion,' he said. As GCCs have become the backbone in India's services sector, the government is turning its focus to them to create thousands of jobs in areas like artificial intelligence (AI), machine learning, data analytics, natural language processing, and generative AI. This comes as hiring slows across traditional information technology (IT) firms due to a tepid growth environment. Unlike traditional business process outsourcing outfits, which handle select functions like payroll or general ledger, GCCs typically run end-to-end processes, manage platforms, and drive product development and engineering. Many are now leading their parent companies' AI-first transitions. 'The existing hubs are getting oversaturated with strained infrastructure, limited talent, and high attrition. And costs are climbing, not just in compensation but in real estate and operations too. It's only a matter of time before the newer locations start taking off,' said Lalit Ahuja, co-founder and chief executive officer of ANSR, in a conversation with Business Standard. India has around 1,760 GCCs, according to Nasscom data, with a growing emphasis on high-value services and engineering research and development (R&D). That number is projected to hit 3,000. More than 500 of these centres are already armed with AI capabilities and a global AI charter, up from 210 in 2023. While many existing GCCs are arms of Fortune 500 companies, the next wave is expected to come from Forbes 2000 firms — smaller, cost-sensitive players for whom Tier-II and Tier-III cities could be ideal. 'The challenge is infrastructure — real estate, tech parks, connectivity, hotels. There are public-private partnership initiatives and financial incentives underway, such as capital expenditure subsidies or hiring sons of the soil. Universities are also being supported to produce more GCC-ready talent. There's growing visibility, awareness, and interest,' Ahuja added. Of the 1,760 GCCs as of last year, only 13 per cent had a Tier-II presence, according to consulting firm Zinnov. A few examples include Bosch, which has a unit in Coimbatore alongside its Bengaluru base; Oracle in Lucknow; and British International Telecom in Pune as well as in Bengaluru, Mumbai, and Gurugram. Ashish Grover, former chief information officer of Chilean e-commerce firm Grupo Falabella, believes that smaller GCCs with limited staff needs are better suited to thrive in Tier-II cities. 'With remote work and AI, it's more about getting the right set of people rather than quantity.' Still, hiring at scale remains a hurdle, which keeps cities like Bengaluru, Hyderabad, and Gurugram firmly in the lead. The talent demographic in smaller cities often skews towards professionals in their late 30s and 40s who settled there after the pandemic and aren't as open to frequent job changes. 'Will companies move to smaller cities just for the incentives if the talent isn't there? The answer is no,' said Nitika Goel, chief marketing and strategy officer at Zinnov. 'The Karnataka government is investing in Grade A infrastructure in Mysuru to make GCCs more accessible. They're also investing in airports and building roads that cut travel time to Bengaluru to two hours. The quality of life is better, and the costs of living are lower. They've set up centres of excellence too. Even if talent isn't readily accessible now, the right incentives can develop that.' The Centre is taking a three-pronged approach to address the talent gap. First, it's looking at the pipeline by understanding what qualifications and expertise companies need. Second, it's working with states to bring on board approvals and incentives for setting up GCCs. And third, it's involving the IT ministry to help states and GCCs curate talent and integrate R&D into their operations. 'The challenge is the talent maturity, especially in emerging tech. Tier-II cities still don't offer the depth. A hybrid model could work, where low-end transaction and processing tasks are handled from these cities to start with,' said Shalini Pillay, partner and India leader — GCC at KPMG.
Time of India
02-07-2025
- Business
- Time of India
Global telcos dial Delhi-NCR for support
Telecom companies had set up shop in Delhi-NCR long before the region became a hotbed for global capability centres (GCCs). Initially drawn by proximity to policymakers, regulators and government telecom agencies, these firms soon realised the region's untapped potential for running complex technology and enterprise operations. Today, Delhi-NCR is a strategic node in global delivery networks for leading telecom giants. The region hosts some of the world's most prominent telecom GCCs, including those of Nokia, Ciena, Ericsson, Orange Business Services, BT Group, AT&T and Amdocs. These centres have evolved into R&D and innovation hubs, operational backbones, and force multipliers for global operations. Arindam Sen, partner and GCC sector lead for technology, media & entertainment and telecommunications at EY India, says NCR offers access to deep engineering talent, robust infrastructure, and the ability to manage both technology and enterprise operations at scale. 'Telecom GCCs initially set up (in Delhi-NCR) to be close to policymakers. Now, the region has transformed into a strategic advantage for them,' he says. Take Nokia. Its GCC in Noida is critical to its international operations. 'These centres are accountable for project delivery, cost efficiency, AI-driven automation, and remote service deployment,' says Sandeep Saxena , head of technology and solutions (mobile networks) at Nokia India. From its India GCC, the company manages networks across nearly 100 countries. Saxena says India does network planning, implementation, automation services, AI-led analytics and real-time field support for global clients. American optical networking and software company Ciena's Gurugram centre is its largest outside North America, and is the brain behind many of the company's signature technologies. The site supports development of Ciena's optical systems, routing and switching platforms, and its intelligent automation platform that provides network and services automation. It also houses engineering labs and product innovation spaces where teams develop solutions tailored for different markets. 'Our team contributes extensively to both hardware and software innovation,' says Amit Malik, VP and sales leader at Ciena India. The Gurugram facility also handles finance, accounting, IT services & support, legal, procurement and marketing. Siddhant Cally, research analyst at Counterpoint Research, says NCR-based GCCs manage everything from network rollout and RAN (radio access network) optimisation to back-end operations, network operations centre (NOC) services, tool development, and automation. A big reason these centres thrive is the region's talent ecosystem. NCR draws from premier engineering institutions – this ensures a steady pipeline of professionals skilled in AI/ML, cloud computing, cybersecurity, and data analytics. Most GCCs have a blend of tech specialists and enterprise professionals. Ciena employs over 2,000 people in India, 60% of whom are in R&D. The company invests heavily in training young engineers through internships and collaborations with local colleges. 'Besides tech skills, we look for people with a sense of curiosity, communication and ability to work in a team,' Malik says. All of these efforts are paying off. Parent companies are looking to the GCCs to define the future. As Nokia's Saxena puts it, 'We're not just supporting operations; we're defining what telecom delivery will look like in the next decade.' Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
