How Engineering R&D is Turning India’s GCCs into Global Innovation Hubs
Engineering R&D-led GCCs in India are climbing the value chain—taking end-to-end product ownership and driving digital transformation.
India is emerging as a hub for innovation in the Global Capability Centre (GCC) space. At the heart of this transformation is Engineering Research and Development (ER&D), now central to value creation. Today, ER&D teams are taking full ownership of products, driving digital transformation, and developing cutting-edge solutions using artificial intelligence (AI), machine learning and advanced analytics.
ER&D now accounts for 55% of growth across more than 1,400 GCCs in India, according to a recent Nasscom report. Demand for ER&D professionals is expected to rise, especially as companies invest in industrial and software products. India is well-positioned to meet this demand, with a strong pipeline of STEM talent. These teams are not just building new products and intellectual property in areas like AI, IoT, and blockchain — they are helping companies stay ahead by improving cybersecurity, strengthening supply chains and streamlining operations through automation. The result: faster innovation, lower costs and greater resilience.
Looking at these advantages, the government is also doing its best to support and foster ER&D in the country with initiatives like Production Linked Incentive (PLI) schemes, which provide financial support. The National Research Foundation, backed by a ₹50,000 crore budget, is dedicated to strengthening research capabilities. Additionally, Digital India initiatives ensure a strong IT infrastructure, while state governments offer extra benefits such as land and other infrastructure support to attract investment.
Despite the rosy picture, not everything is hunky-dory. Talent retention continues to be a challenge. With a 20-30% attrition rate in some technology segments, there is an urgency for effective retention strategies. Additionally, with the rapid pace of technological change, existing talent often faces skill gaps. This challenge intensifies with the rise in global competition.
However, India still reflects a promising future, thanks to the country’s strong value for R&D in GCCs, built on factors like deep talent, cost advantages, a mature ecosystem and strong government support. While the country faces manageable challenges in areas like talent retention, these are not fundamental obstacles. The continued growth in high-value sectors and new GCC jobs shows ongoing confidence in India’s R&D landscape.
