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India’s Global Capability Centres (GCCs) have undergone a significant transformation, evolving from cost-driven operations to strategic global R&D powerhouses. According to a Nasscom report titled “GCC 3.0: Positioning India as the Global R&D Hub – A Strategic Trend Analysis,” Engineering Research & Development (ER&D) has become a major driver of growth within these centres.

The report highlights India’s compelling value proposition, which includes a vast and skilled talent pool, notable cost efficiencies, and a sophisticated innovation ecosystem supported by strong government initiatives. India’s labor costs are 40-60% lower, and R&D costs can be 70-80% lower than in Western counterparts, making it an attractive destination for companies looking to set up R&D operations.

India currently hosts over 1,800 GCCs, with ER&D accounting for 55% of their growth. The number of GCCs is projected to cross 2,400 by 2030, with revenue generation exceeding US$100 billion. This growth is driven by India’s strategic importance as a global R&D hub, with companies leveraging the country’s talent pool, cost advantages, and innovation ecosystem to drive innovation and competitive advantage.

However, the report also addresses key challenges such as talent retention, intellectual property protection, and infrastructure gaps. To overcome these challenges, organisations need to develop strategic plans that take into account India’s unique strengths and weaknesses.

The report cites case studies of established GCCs like Microsoft India Development Centre and GE John F. Welch Technology Centre, which illustrate the depth and impact of R&D operations in India. These centres have become integral to the global innovation strategies of these companies, leveraging India’s talent pool and innovation ecosystem to drive growth and competitiveness.

The report concludes that India’s GCCs have become a leading force in global innovation and competitive advantage. With its skilled talent pool, cost efficiencies, and supportive government policies, India is well-positioned to continue driving growth and innovation in the GCC sector. As the number of GCCs in India continues to grow, the country is likely to play an increasingly important role in shaping the future of global R&D.