Govt to unveil national framework to boost GCCs in Tier 2 cities

Union Finance Minister Nirmala Sitharaman announced on February 1 a national framework to accelerate the growth of Global Capability Centres (GCCs) in emerging tier 2 cities, a sector expected to contribute 3.5% of India's GDP by 2030.

The framework, aimed at guiding states in promoting GCCs, will suggest measures to enhance talent availability, infrastructure, and collaboration with industry, Sitharaman said while presenting the Budget.

The announcement comes as the Economic Survey revealed a significant surge in GCCs in India, with the number growing to over 1,700 in FY24 from approximately 1,430 in FY19. As of FY24, GCCs in India employ nearly 19 lakh professionals, with global roles expected to grow to over 30,000 by 2030.

The GCC sector has emerged as a key driver of software job creation, outpacing the traditional information technology (IT) sector in 2024. India, now hailed as the GCC capital of the world, has added over three lakh employees and nearly $20 billion in export revenue in 2024, dwarfing the IT sector's growth.

In contrast, IT companies have struggled to maintain momentum, adding less than a lakh in headcount and just $6 billion in market size during the same period. The slowdown in the IT sector is attributed to demand pressure triggered by a macroeconomic slowdown in key markets such as North America and Europe.

The national framework aims to capitalize on India's strengths in the GCC sector, including its strong middle-management talent and the adoption of AI and ML technologies. The setting up of AI Centres of Excellence is expected to further enhance India's GCC landscape.

"The GCC sector has emerged as a key driver of growth and job creation in India, and we are committed to supporting its expansion," Sitharaman said. "The national framework will provide a roadmap for states to promote GCCs and capitalize on the sector's potential.”