Bengaluru solidifies GCC hub status with 875 units, NCR a distant second with 465

Apart from the vast tech talent pool and the ecosystem that Bengaluru has to offer, several policy initiatives have also been taken up by the state.

Bengaluru continues to lead the global capability centre (GCC) race in India with more than 875 such units in FY24, way ahead of nearest rival National Capital Region’s (NCR’s) count of 465.

“Bengaluru’s status as GCC hub is solidified, thanks to a robust GCC and innovation ecosystem, availability of talent, and a conducive environment for talent mobility,” the latest report on the sector released by the IT industry body Nasscom and consulting firm Zinnov on September 11 said.

A GCC is a dedicated offshore unit a company sets up in a foreign country to in-source information technology (IT) and related business functions. The NCR Indias includes national capital Delhi and parts of the neighbouring states of Haryana, Uttar Pradesh and Rajasthan.

India had over 1,700 GCCs in FY24, with their export revenue rising more than 40 percent from the previous year to $65 billion, the report said.

The numbers are significant for India’s tech hub as the overall hiring in the IT sector has stagnated in the recent past.

From the previous fiscal, Bengaluru’s GCC units count increased by 6.7 percent in FY24. NCR increased its tally by 5.7 percent to 465 from 440. At the third spot, Mumbai’s saw the lowest increase of 2.8 percent to 365 GCC units.

A GCC unit is a single centre within a city or region but a company can have multiple units across a country, all part of one GCC.

Another city that stood out was Chennai, which increased its tally by almost 25 percent to 305 from 245. Tamil Nadu is giving Karnataka a run for its money, having announced plans to incentivise the creation of high-paying jobs in new GCCs.

While presenting the budget in February, Tamil Nadu finance minister Thangam Thennarasu announced that the state plans to attract GCCs by offering a payroll subsidy. The structure would be: 30 percent in the first year, 20 percent in the second year and 10 percent in the third year for jobs paying more than Rs 1 lakh a month.

Also read: Karnataka, Tamil Nadu woo GCCs with incentives in state budgets

Advantage Bengaluru

Apart from the vast tech talent pool and the ecosystem that Bengaluru offers, several policy initiatives have also been introduced by the state.

Karnataka is mulling a dedicated GCC policy to attract higher investment. When the plan fructifies, it will be the first state in India to enact such a policy. Karnataka introduced the "Karnataka Startup Policy 2022-2027" in 2022 to promote industry partnerships between technology institutions and the existing GCC ecosystem in the state.

In terms of land absorption, Bengaluru topped GCC leasing with over 15.34 million sq ft (msf) of absorption among the top eight cities in 2023, according to Knight Frank India. GCCs will occupy around 35 percent of all commercial real estate in India in 2024 and IT companies around 16 percent, the same report said.

In March, a report by Nasscom and Zinnov said Bengaluru was the frist choice of semiconductor companies setting up GCCs in India. Government-led initiatives aimed at fostering indigenous semiconductor production in India significantly increased investment over the years, the report said.

“State governments of Karnataka and Tamil Nadu are crafting GCC-specific policies with a focus on Tier-Il/lll cities, such as the startup TN policy and the Karnataka Data Center Policy, spurring further growth in these regions,” the report said.

Also read: Just 6 metros hold the lion’s share in GCC location, talent in India