India’s GCC framework in Budget 2025: Industry lauds but urges deeper collaboration

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Industry leaders have welcomed Finance Minister Nirmala Sitharaman’s focus on Global Capability Centres (GCCs) in Budget 2025, moves that could give a fillip to India's position as a global hub for talent capabilities beyond just Bengaluru and other metro cities.

On February 1, Sitharaman announced a national framework to guide states in promoting GCCs, a sector poised to contribute 3.5 percent of India’s GDP by 2030.

Through this framework, the aim is to provide structured guidance to states. However, experts say that cooperation between various stakeholders is essential to ensure the policy's long-term success.

GCCs have been important in driving high-quality job creation in the past several years at a time when the information technology (IT) industry is struggling.

According to Ramkumar Ramamoorthy, Partner at Catalincs and former CMD of Cognizant India, many GCCs are already expanding their presence in India, making the guiding framework an important enabler. "This initiative will help create built-to-suit, grade A commercial infrastructure while also enhancing the talent pipeline and promoting collaboration between academia and industry," he told Moneycontrol.

Additionally, he pointed out that relocating to Tier-2 cities can significantly improve workforce diversity, with women’s representation in such locations often 10-15 percent higher than in metros.

Which cities will benefit?

India’s GCC sector has seen outstanding growth, with an increasing number of global firms setting up operations in emerging Tier-2 cities.

Arindam Sen, Partner and GCC sector leader (TMT) at EY India, said that cities such as Jaipur, Vadodara, Coimbatore, and Kochi are becoming attractive alternatives to traditional hubs like Bengaluru and Hyderabad.

"The national framework will provide much-needed clarity for states looking to enhance talent availability, improve infrastructure, and build deeper industry partnerships," he further said.

The announcements are being seen in light of Tier II and III cities struggling to gain market share despite efforts by individual states. Although increasing year-on-year, these cities housed only about 7 percent of the GCCs in India by FY2024, according to a report from industry body National Association of Software and Service Companies (Nasscom) and consulting firm Zinnov.

Also, read: Only 8% of GCCs present in Tier II cities in India as Tier I maintains dominance

Therefore, Karthik Padmanabhan, Managing Partner at Zinnov, highlighted the importance of a strategic plan at the national level to drive this growth further. "By aligning FDI (foreign direct investment) policies and bringing together all key stakeholders—including GCCs, service providers, startups, and industry bodies—the framework can ensure a structured and sustainable expansion of this sector," he said.

Decentralisation of Jobs

Beyond monetary benefits, the GCC push into Tier-2 cities is in line with the government’s broader goal of job decentralisation.

Lalit Ahuja, CEO of ANSR, which sets up GCCs for companies in India, sees the initiative as a game-changer. "With 80% of global firms yet to establish GCCs in India, this move significantly enhances the country's attractiveness as a global GCC capital. ANSR has already been working with KDEM (Karnataka Digital Economy Mission), GIFT City (Gujarat International Finance Tec-City), and multiple state governments to facilitate GCC expansion in emerging urban centers," he said.

Ahuja believes the framework will not only generate millions of skilled jobs but also place India as the preferred destination for global enterprises seeking high-end capabilities.

General Mills India Center, a GCC, agrees with Ramamoorthy that there’s a need to strengthen talent pipelines and consider industry collaboration.

"The emphasis on a national GCC framework is a strong signal of India’s commitment to building a future-ready digital and innovation ecosystem," said the GCCs Director-FSS and Site Lead, Monika Potharkar.

Immediate Beneficiary: Real Estate

As a result of the policy, the real estate sector is also expected to benefit from the expansion of GCCs.

Real estate advisory and consulting firm ANAROCK anticipates increased investment in commercial spaces in both metro and non-metro locations. "This move will enhance India's status as a global business hub while simultaneously fueling office space requirements in major IT corridors and upcoming cities," he added.

Other office space operators have cheered the finance minister's Budget announcement.

GCCs are increasingly accounting for a large part of office leasing in India. Nearly 25 million square feet of space was leased to set up GCCs in 2024, representing 28 percent of all leasing that year, a report from real estate consultants Cushman & Wakefield said.

"The national framework for Global Capability Centres (GCCs) is encouraging, as we have seen GCCs emerge as some of the largest occupiers of Grade A office spaces. Strategic infrastructure upgrades in emerging cities will unlock new opportunities for businesses and further India’s position as a global services hub," Mindspace Business Parks REIT chief executive officer Ramesh Nair said.

Also, read: GCC framework proposed in Budget for Tier 2, 3 cities can boost real estate demand, say experts