MNC technology centers represent one fifth of India’s tech sector

BENGALURU: Global Capacity Centers (GCCs) now contribute a fifth of India’s tech sector revenue. They contributed 19.5% of IT revenue of $ 174.3 billion in 2019-2020, up from 15.9% of revenue of $ 118.6 billion in 2014-15. Technology sector revenues exclude hardware revenues.
GCCs are the technology and shared services hubs of multinationals in India. India has 1,300 GCC employing 1.3 million. GCC revenue was $ 19.4 billion in 2015, indicating a revenue CAGR of 11% between that date and fiscal 2020.
GCC revenues can potentially reach $ 60-85 billion by 2025, up from $ 33.8 billion in 2019-20, according to a recent report from Deloitte and Nasscom. The turnover of $ 33.8 billion represents about 1% of India’s GDP.
The history of GCC in India began with the establishment by Texas Instruments (TI) of an R&D center in Bangalore in 1985.
Today, many of the world’s largest companies have centers in India, including Walmart, whose Indian team was instrumental in the development of Optima, a solution that uses algorithms to generate travel routes. Optimized in-store selection for grocery orders.
A number of CCGs today have strategic capabilities in digital and their own functional areas to drive business results.
KS Viswanathan, vice president of industry initiatives at Nasscom, says there is increased confidence in GCC’s management capabilities today.
“It’s not just a place at the table, but also a voice. The voice of Indian leaders in the CCGs is heard due to the growing trust factor and managerial capacities. Many traditional industries are looking to CCGs to redefine their technology plan, ”he said.
What has worked in India’s favor is the availability of contextually skilled talent working on cutting edge technologies and a mature operating model.
“Until 2015-2016, most centers were shared service centers. From that point on, companies began to view India as a center of technology and capabilities – hubs that increased their capabilities in digital technologies. The shared services narrative has evolved into centers of excellence, ”says Viswanathan.
For example, in the finance function, CCGs have moved from managing transactions to housing controllers with increased global ownership.
Lalit Ahuja, Founder and CEO of ANSR, a company that has helped many multinationals establish GCCs in India, says India’s GCCs have become effectively managed global distributed teams, complementing their digital strategies.
“CCGs have moved from an outsourcing footprint to increased technology intensity, focused on innovation and building new business capabilities. CCGs are now becoming a national agenda and a priority for all major states. The pandemic has led to a greater focus on digital and technology adoption, and India is providing both skill and scale, ”he says.
The Deloitte-Nasscom report states that India also offers the unique advantage of consistency of skilled talent across all locations, enabling GCCs to expand their operations for risk mitigation and business continuity.
The report estimates an additional $ 10-20 billion market from new CCGs that could create a hub in India. He says the country should market itself as a global GCC hub and position itself as a “volume + value” creator. That, combined with the incentives, tax breaks and clarity on transfer pricing, will help attract many more CCGs, according to the report.

Leave A Reply

Your email address will not be published.