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Japanese companies are turning to India as a key partner for growth, driven by the country’s large talent pool, cost advantages and ability to accelerate digital transformation. According to the JoulestoWatts (J2W) GCC Adoption Survey 2025, over 50 Japanese firms across various sectors are establishing Global Capability Centres (GCCs) in India. 

India’s attractiveness stems from several factors, including its talent availability, with 1.5 million STEM graduates annually, potential cost savings of up to 40%, and ability to support rapid digitalisation and innovation.

The survey highlights that Bengaluru and Hyderabad are the preferred locations for GCCs, with over 60% of respondents shortlisting these cities. Other cities, such as Chennai, Pune, Mumbai, and Delhi-NCR, are also popular destinations. 

Tier-II cities like Kochi and Pune are gaining traction due to cost advantages and expanding talent pools. Japanese companies are increasingly viewing India GCCs as Centres of Excellence rather than support arms, driving R&D, automation, cybersecurity and ESG integration.

The survey also reveals that Japanese corporations are facing challenges in their domestic market, including labour shortages, high operational costs, and slow digitalisation. Labour shortage is a significant concern, with 72% of respondents citing it as a key challenge. High operational costs and slow digitalisation are also major issues, with 64% and 48% of respondents mentioning them, respectively. 

To maintain competitiveness, Japanese firms are chasing ambitious transformation goals in India, including 85% process efficiency, 20% reduction in average handling time and at least 15 AI/ML projects in the coming year.

The investment emphasis in India is on AI-driven decision-making, automation, cybersecurity and ESG integration. Companies are placing strong emphasis on workforce development, aiming for a 60% upskilling rate across their Indian operations. Sector-specific focuses are emerging, with BFSI and IT respondents prioritising compliance and fintech innovation, while automotive and manufacturing leaders focus on EV battery R&D and smart factory technologies. 

Sustainability has become a key priority, with around 65% of firms planning to roll out real-time carbon monitoring and renewable energy adoption, targeting a 25% cut in emissions by 2026 and sourcing 40% of power from green energy.

The growth of GCCs in India is driven by the country’s large talent pool, cost advantages, and ability to accelerate digital transformation. As Indian GCCs continue to evolve, they are becoming critical to the success of global companies. With the GCC sector in India expected to cross US$100 billion in revenue by 2030, it’s clear that India will remain a key destination for global companies seeking to establish GCCs.