Iran war pushes American MNCs to reassess operations; India GCCs may emerge as refuge

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With Iran signalling potential strikes on facilities linked to major American technology companies in the Middle East, global multinationals may re-evaluate business continuity strategies. Industry experts say the tensions could push companies to move more workloads to their global capability centres (GCCs) in India.

While companies remain cautious on decision-making in the near term, India will benefit from its positioning as a “safe harbour” and geopolitically stable market, industry experts said.

According to Mohammed Faraz Khan, Partner at Zinnov, a GCC consulting firm, multinational companies typically run regional headquarters and capability hubs from cities such as Dubai and Abu Dhabi in the UAE, Riyadh in Saudi Arabia, and Doha in Qatar, which support operations across the broader Middle East.

Historically, cities like Riyadh and Dubai have offered high-value strategic proximity and tax-free incentives, but the current instability along with ocean route disruptions and attacks on regional infrastructure and assets  have introduced unexpected operational risk that many corporations are struggling to mitigate.

“This (war) has led to a noticeable halt in the investments in the Middle East, as global firms move into a "wait-and-watch" mode, prioritising the fortification of existing hubs rather than the establishment of massive new workforces in the region,” said Alouk Kumar, founder and CEO, Inductus Group, a GCC advisory firm.

Gaurav Vasu, founder and CEO at market intelligence firm UnearthInsight, described the current business environment in the region as one of “cautious continuity.”

“Headquarter investment committees are asking harder questions about geopolitical concentration and business continuity,” he said.

Vasu added, “Since most multinationals only have sales infrastructure here, the risk isn't capability centre closures - it's slower tech services contracts and delayed expansion. AI and quick-ROI deals will still get funded. Large multi-year transformation bets will take longer.”

War impact on tech companies

The growing scepticism has already started to reflect on the recent decisions of several global giants to scale back or suspend their physical presence in war-torn regions. For instance, Meta has temporarily closed its research and development (R&D) office in Tel Aviv, Israel. Banks like Citi, HSBC, and Standard Chartered have asked employees in UAE and Qatar to work remotely and evacuate office campuses.

Data centres linked to Amazon Web Services (AWS), too, were hit by drones in the UAE and Bahrain, disrupting many businesses storing their data with the cloud service provider in the region. Incidents like these are further fuelling the drive towards more stable, diversified geographies.

Iranian state-affiliated Tasnim news agency published a list titled "Iran’s new targets" on March 11, which reportedly includes offices and facilities linked to Google, Amazon, Microsoft, Nvidia, IBM, Oracle, and Palantir across Israel, Dubai, Abu Dhabi, and other parts of the Middle East.

"With the expansion of the regional war into an infrastructure war, the scope of Iran’s legitimate targets gradually becomes broader," Tasnim noted.

How do GCCs in India and Middle East compare?

To be sure, the offices of Microsoft, Oracle, SAP, Salesforce, Cisco Dell, and others in Dubai, Abu Dhabi, and Riyadh are largely sales and commercial offices, unlike their Indian offices, which are also large-scale engineering hubs or delivery centres.

The Middle East is also one of the key markets for technology consumption more than being a producer of it.

According to data from Inductus Group, the fundamental difference lies in scale versus strategic intent between the two regions. India currently hosts over 1,850 GCCs with a workforce approaching 2.2 million professionals. The sector is projected to contribute roughly $110 billion to India's GDP by the end of 2026.

India serves as the “global innovation engine”, where complex R&D, AI-native product development, and large-scale engineering are executed. In contrast, while the number of pure-play GCCs in the Middle East is smaller, numbering in the low hundreds, the region acts as a "Strategic Command" hub.

Rather than 5,000-person engineering floors, Middle Eastern hubs often house high-impact units of 100–500 specialists that drive regional transformation, manage sovereign wealth investments, and oversee EMEA-wide operations, the data showed.

Tech spending takes a hit

The bigger impact will be on the technology budgets of American and European companies, going forward, as rising oil prices takes a toll on global growth and compress the margins of the respective companies.

UnearthInsight expects global tech spending growth to moderate to 4–5 percent from 5–7 percent, with IT services growth slowing to around 2–3 percent for FY27.

“The immediate impact will be slower decision-making and delayed budget approvals,” said Vasu.

He added, “India benefits, not because of the conflict, but because the conflict reinforces the risk argument against the Middle East. Any multinational reassessing its delivery model will land in India.”

Zinnov’s Khan expects no immediate structural changes to GCC strategies in the region as multinationals are still closely monitoring the geopolitical changes.

“The Middle East continues to be seen as a business environment with strong infrastructure and established security frameworks. So far, there are no clear signs of large-scale exits or sudden reversals of investment from companies operating GCCs in the region," he said.