Introduction
For years, the business case for establishing a Global Capability Centre (GCC) in India was relatively straightforward. Multinational companies could access a large talent pool, reduce operating costs and manage essential business functions from a location with an established technology services ecosystem.
That business case still matters. But it no longer tells the whole story.
Today, Indian GCCs are increasingly involved in developing products, building artificial intelligence capabilities, managing complex technology platforms and contributing to decisions that affect their parent organisations worldwide. Their role is shifting from executing work designed elsewhere to taking greater ownership of the work itself.
The scale of India’s GCC ecosystem reflects how significant this transformation has become. According to the NASSCOM–Zinnov GCC Landscape Report 2026, India had 2,117 GCCs operating across 3,728 units as of FY2026. These centres employed approximately 2.36 million professionals and generated $98.4 billion in market revenue. The number of GCCs had grown by 32% since FY2021.
These figures tell us about the industry’s size. The more interesting question is what these centres are now being asked to do.
For companies evaluating India as a destination for global operations, the shift has important implications for talent strategy, operating models, technology investment and workplace planning.
Let’s explore how GCCs are evolving from cost-focused delivery operations into innovation hubs and what businesses need to consider when building their own centres.
1. The Traditional GCC Model Was Built Around Cost Efficiency
To understand the current transformation, it helps to look at why GCCs were established in the first place.
Many multinational companies initially set up captive centres in India to manage functions that could be delivered efficiently outside their headquarters. These included finance and accounting, payroll, customer support, IT services, data processing and other business operations.
The objective was to centralise work, improve consistency and take advantage of India’s availability of skilled professionals at competitive operating costs.
In this model, the headquarters generally retained ownership of major business decisions, while the Indian centre focused on executing defined processes and meeting service requirements.
Performance was often assessed through measures such as cost per transaction, productivity, turnaround time, accuracy and service-level compliance.
This approach offered genuine benefits. Companies could consolidate fragmented activities, standardise processes and create teams that supported multiple international markets.
However, it also had limitations.
When a centre’s responsibilities are restricted to executing predefined tasks, its ability to influence product strategy, develop new capabilities or make independent decisions can remain limited. The organisation may gain operational efficiency without fully using the expertise available within its Indian workforce.
That distinction is becoming increasingly important as businesses look for more value from their global operations.
The modern GCC model builds on the efficiencies of the traditional approach while expanding the centre’s responsibilities into areas that directly influence business performance and future growth.
2. GCCs Are Moving Towards Greater Ownership and Accountability
One of the defining changes in India’s GCC ecosystem is the growing emphasis on ownership.
Rather than measuring success only through the volume of work completed, companies are increasingly giving Indian teams responsibility for products, platforms, technology capabilities and business outcomes.
The NASSCOM–Zinnov 2026 report describes this shift as a move from a delivery engine towards an enterprise nerve centre. It identifies greater ownership of global responsibilities, faster progression towards mature operating models and the expanding role of India-based leadership as important developments in the ecosystem. What does this look like in practice?
Consider a multinational software company.
Under a traditional delivery arrangement, its Indian team might handle testing, maintenance and technical support for a product developed elsewhere.
Under a more mature GCC model, the same team could take responsibility for product architecture, feature development, release planning, quality engineering and platform performance. Its leaders might participate in roadmap discussions and make decisions about how the product evolves.
The centre is no longer simply helping another team deliver a product. It is contributing directly to the product’s success.
The same shift can occur in finance, cybersecurity, engineering, analytics and other functions.
A finance GCC might move beyond transaction processing to provide forecasting, business intelligence and strategic analysis. An engineering centre might progress from testing and maintenance to developing proprietary technologies.
The important change is not just the complexity of the work. It is the accountability attached to it.
When a GCC owns measurable outcomes, it becomes easier to connect its contribution to the parent company’s strategic priorities.
3. Artificial Intelligence Is Accelerating the Transformation
Artificial intelligence is one of the strongest forces reshaping the GCC model.
Companies are looking for ways to automate repetitive activities, improve decision-making, develop intelligent products and integrate AI into their existing operations. These requirements create opportunities for GCCs with the technical expertise and organisational support needed to build and deploy AI solutions.
The NASSCOM–Zinnov GCC Landscape Report 2026 found that nearly half of the GCCs established since FY2021 were built with AI as a core focus from inception. The report also identified more than 1,200 Indian GCCs with integrated AI and machine learning capabilities.
This suggests that AI is increasingly being considered when companies design new centres rather than being introduced only after an operation has matured.
How GCCs are contributing to AI adoption
Indian GCC teams can support AI initiatives in several ways.
Developing AI-enabled products: Engineering teams can build intelligent features, integrate models into applications and improve existing products.
Automating business processes: Teams can identify repetitive activities suitable for automation and design workflows that combine software, AI and human oversight.
Building data capabilities: AI systems depend on reliable data. GCCs can help develop data pipelines, analytics platforms, governance frameworks and infrastructure.
Supporting responsible AI: Teams can contribute to model evaluation, monitoring, security, documentation and controls that help organisations manage risks.
Transforming internal operations: GCCs can help departments identify suitable AI use cases and evaluate whether new tools improve productivity, accuracy or service quality.
However, AI adoption does not automatically make a GCC innovative.
A company may introduce AI tools while leaving its operating model unchanged. If the Indian centre still lacks authority over technology decisions, investment priorities or product outcomes, its strategic contribution may remain limited.
The real opportunity lies in combining technical expertise with the authority and resources required to implement meaningful change.
4. Product Development Is Becoming a Core GCC Responsibility
Another important development is the growing role of GCCs in product development.
Multinational companies increasingly need teams that can work across the product lifecycle, from initial research and design to engineering, testing, deployment and continuous improvement.
India offers access to professionals across software engineering, data science, cloud computing, cybersecurity and other technical disciplines. This allows companies to build multidisciplinary teams that support products used across global markets.
A mature GCC may take ownership of a complete product module, manage a technology platform or lead the development of new features.
The distinction matters because product ownership requires a different operating approach from task-based delivery.
Teams need to understand customer requirements, make technical trade-offs, coordinate with other functions and take responsibility for outcomes. They also need access to decision-makers who can approve priorities and resolve dependencies.
A centre expected to develop products cannot operate effectively if every important decision must pass through multiple layers of approval at headquarters.
Companies must therefore align responsibilities with authority. If a GCC is accountable for product delivery, its leadership needs sufficient influence over roadmaps, resources and execution.
This also affects recruitment. Product-focused centres may need experienced product managers, architects, design professionals and technical leaders in addition to software developers.
The workplace and collaboration model should support these teams through effective communication, secure technology infrastructure and spaces suited to focused work and cross-functional problem-solving.
5. Research and Development Are Expanding the Scope of GCCs
Research and development (R&D) is another area in which GCCs can contribute beyond routine operations.
Companies across technology, automotive, financial services, healthcare and other industries require specialised teams to develop new technologies, improve existing products and solve complex business problems.
An Indian GCC can support these activities through engineering, experimentation, simulation, analytics, testing and research-related work.
For example, an automotive company may use its Indian centre to develop software for connected vehicles, improve embedded systems or support engineering simulations. A healthcare technology company might build data platforms or develop software used in research and clinical operations, subject to the relevant regulatory and security requirements.
These activities require more than a large workforce. They depend on specialised expertise, access to appropriate tools, collaboration with global research teams and a culture that supports experimentation.
Not every GCC will have the mandate or infrastructure to conduct advanced research. The requirements of a software engineering centre differ considerably from those of a facility involving physical laboratories, specialised equipment or regulated research activities.
Companies should therefore define the type of R&D they intend to undertake before choosing a city, recruiting a team or selecting an office.
Where research is central to the centre’s mandate, infrastructure and security requirements must be incorporated into the original business case rather than treated as later additions.
6. India’s GCCs Are Taking on More Strategic Business Functions
The evolution of GCCs is not limited to technology.
Many centres support finance, risk management, procurement, human resources, analytics, compliance and other business functions. These operations can also move beyond routine service delivery as their responsibilities expand.
A finance centre, for example, may initially manage accounts payable, reconciliations and reporting. Over time, it could develop capabilities in financial planning and analysis, forecasting, business intelligence and decision support.
A procurement team may progress from processing purchase orders to analysing supplier performance, identifying spending patterns and supporting strategic sourcing.
Similarly, a risk and compliance team may move from routine monitoring to developing analytical tools that help the organisation identify emerging risks.
These developments can strengthen the GCC’s contribution to global decision-making.
However, the transformation requires access to relevant data, strong domain knowledge and a clear mandate. A team cannot provide meaningful strategic analysis if it lacks the information or authority required to influence decisions.
Companies should therefore examine not just which functions they move to India, but how much responsibility those functions will hold once they arrive.
7. Leadership and Organisational Design Must Evolve Too
A GCC cannot become an innovation hub simply by hiring more skilled employees.
Its organisational structure must allow those employees to use their expertise, make decisions and influence outcomes.
This is where leadership becomes especially important.
In a traditional delivery-focused model, the local leadership team may concentrate on workforce management, service quality, productivity and cost control.
A more mature GCC may require leaders who can also manage product roadmaps, influence global investment decisions, develop technical capabilities and coordinate across international business units.
These responsibilities call for stronger connections between the Indian centre and the company’s global leadership.
What needs to change?
Clear ownership: Each function should have defined responsibilities, decision rights and measurable outcomes.
Access to leadership: GCC leaders should participate in relevant business and technology discussions rather than receiving decisions only after they have been made.
Investment in skills: Employees need opportunities to develop expertise in emerging technologies, leadership, product management and business strategy.
Cross-border collaboration: Teams should have established processes for working with headquarters and other global locations.
Recognition of outcomes: Performance evaluations should reward innovation, quality and business impact alongside operational efficiency.
The NASSCOM–Zinnov 2026 report highlights the growing importance of global ownership and India-based leadership as the GCC ecosystem matures. For companies setting up a new centre, these principles are worth considering from the beginning. It can be easier to design an effective operating model at the outset than to restructure a centre after years of narrowly defined responsibilities.
8. The Shift from Cost Arbitrage to Capability Arbitrage
The move towards innovation-led GCCs is often described as a shift from cost arbitrage to capability arbitrage.
Cost arbitrage means taking advantage of differences in operating costs between locations. Capability arbitrage means using the expertise, skills and specialised knowledge available in a particular market to build business value.
The two are not mutually exclusive.
India can still offer cost advantages for many functions. However, companies increasingly have the opportunity to use those advantages to develop capabilities that might otherwise be expensive, difficult or time-consuming to build elsewhere.
For example, a company might establish an Indian GCC to access software engineering talent and then expand the centre’s mandate to include AI development, product management and platform ownership.
The value of the centre would then extend beyond the cost difference between two locations.
This shift also changes how companies should measure performance.
A delivery-focused operation may be assessed through cost per transaction, turnaround time and service-level compliance.
A capability-led centre may also need measures such as product release speed, system reliability, research milestones, successful AI deployments, revenue contribution or improvements in customer experience.
The appropriate metrics depend on the work being performed.
The objective is not to abandon cost efficiency. It is to ensure that cost efficiency does not become the only measure of success.
9. What the Transformation Means for GCC Office and Workplace Strategy
As GCCs take on more complex responsibilities, their workplace requirements may change.
A centre built primarily for standardised transaction processing may have different space requirements from one managing product development, engineering, AI research or sensitive business operations.
The office should support the work employees are expected to perform.
Technology and infrastructure readiness
GCCs working with sensitive systems or proprietary technology may require reliable connectivity, backup power, controlled access, secure networks and appropriate IT infrastructure.
The exact specifications depend on the company’s security policies, the nature of its data and applicable regulatory requirements.
Collaboration and focused work
Product development and innovation often involve cross-functional collaboration, but employees also need uninterrupted time for complex tasks.
A well-planned workplace should balance meeting rooms, collaborative areas, quiet spaces and individual workstations according to the team’s working patterns.
Flexibility and future expansion
A newly established GCC may begin with a small team and grow as the parent company assigns additional responsibilities.
Companies should evaluate whether their chosen office can accommodate that growth without requiring disruptive relocations or excessive unused space.
A managed office or flexible workspace may suit an initial team or a phased launch, while a traditional lease may be appropriate for a larger operation requiring greater customisation and long-term control.
For specialist R&D activities, a standard office may not be sufficient at all. Additional facilities or technical infrastructure may be necessary.
Location and talent access
The office location should also support recruitment and employee access.
Bengaluru, Hyderabad, Pune, Chennai, Mumbai and Delhi NCR offer different combinations of talent, industry expertise, business infrastructure and commercial real estate. Companies should compare individual business districts rather than assume that every part of a city offers the same advantages.
For businesses planning their Indian operations, Flexo’s complete guide to setting up a GCC in India provides a starting point for evaluating setup considerations and workplace decisions.
10. The Challenges Companies Must Address
The shift towards innovation-led GCCs creates opportunities, but it also introduces challenges.
A company cannot expect its Indian centre to take on strategic responsibilities without making corresponding changes to leadership, investment and governance.
Talent competition
Experienced AI specialists, engineering leaders, product managers and other professionals can be difficult to recruit in competitive markets.
Companies need realistic hiring plans, appropriate compensation and opportunities for career development. A large overall talent pool does not guarantee immediate access to every specialised skill.
Unclear decision-making authority
A GCC may be expected to innovate while lacking control over product priorities, technology choices or budgets.
This creates a gap between accountability and authority.
Companies should define which decisions can be made locally, which require global approval and how disagreements will be resolved.
Inadequate investment
Innovation requires investment in people, infrastructure, tools and experimentation.
If the centre is expected to develop new products but its budget covers only routine operations, its ability to deliver on that mandate will be constrained.
Weak intellectual property processes
Developing new products and technologies raises questions about ownership, documentation, licensing and the protection of proprietary information.
Companies should establish appropriate legal arrangements and processes for handling intellectual property created by employees and external partners.
Measuring the wrong outcomes
If a centre is evaluated only on cost reduction and headcount, employees may be encouraged to prioritise short-term efficiency over long-term capability development.
A balanced performance framework should reflect both operational discipline and the centre’s strategic mandate.
The risk of treating AI as a shortcut
AI tools can improve productivity, but they do not eliminate the need for domain expertise, reliable data, sound engineering and human oversight.
Companies must assess where AI can create value and where additional controls or specialised expertise are required.
The most successful transformation programmes are likely to be those that address these challenges alongside technology investment rather than assuming innovation will follow automatically.
11. How Companies Can Build an Innovation-Led GCC
For a company planning a new GCC, the move beyond a traditional delivery model should be reflected in the setup strategy.
The following steps provide a practical starting point.
Step 1: Define the strategic mandate. Identify the capabilities the centre will own and how they support the parent company’s objectives. Avoid defining the operation solely by headcount or cost targets.
Step 2: Choose the right functions. Determine which activities benefit from direct ownership in India and which may remain with headquarters or external providers.
Step 3: Assess talent requirements. Identify the technical, functional and leadership skills needed to support the centre’s intended responsibilities.
Step 4: Select the right location. Compare cities and business districts based on specialised talent, infrastructure, recruitment requirements, office availability and expansion potential.
Step 5: Establish governance early. Define decision rights, reporting lines, investment responsibilities and the relationship between the Indian leadership team and headquarters.
Step 6: Invest in technology and infrastructure. Ensure that employees have the tools, systems, security arrangements and working environment required to perform their roles.
Step 7: Define appropriate performance measures. Track operational efficiency alongside innovation, product delivery, quality and strategic outcomes where relevant.
Step 8: Review and expand the mandate. Evaluate performance regularly and identify opportunities for the centre to take on additional responsibilities as its capabilities develop.
This approach allows companies to plan for a centre that can evolve with the business instead of becoming locked into a narrow operating model.
Frequently Asked Questions
1. How are GCCs in India evolving?
Indian GCCs are increasingly moving beyond routine support functions and taking on responsibilities in AI, software engineering, product development, R&D, analytics and strategic business operations. Many companies are also giving their Indian teams greater ownership of products, platforms and global business outcomes.
2. Why are GCCs moving from cost centres to innovation hubs?
Companies want their GCCs to contribute more directly to business growth, technology development and transformation. India’s talent pool and established technology ecosystem provide opportunities to build specialised capabilities, while changes in leadership and operating models can give these teams greater responsibility for innovation.
3. Does every GCC need to become an innovation hub?
No. Some centres are established primarily to deliver standardised business services efficiently, and that may remain the right model for their purpose. The operating model should reflect the company’s needs. Innovation-led responsibilities are most appropriate when the organisation has a clear business case, suitable talent and the resources to support them.
4. What role does AI play in modern GCCs?
AI can help GCCs develop intelligent products, automate workflows, strengthen analytics, improve technology operations and support enterprise transformation. Its value depends on suitable data, technical expertise, governance and a clear understanding of the business problems the technology is intended to solve.
5. Which Indian cities are suitable for innovation-focused GCCs?
Bengaluru, Hyderabad, Pune, Chennai, Mumbai and Delhi NCR are important markets to evaluate. The right choice depends on the required skills, industry ecosystem, infrastructure, cost structure and office requirements. Companies should also consider whether emerging locations can support their specific talent and operational needs.
6. How does an innovation-led GCC affect office requirements?
Innovation-focused centres may require a combination of secure technology infrastructure, collaborative spaces, focused work areas, meeting facilities and room for future expansion. R&D activities may need specialised facilities beyond a conventional office. Requirements should be defined according to the actual work being performed.
7. How can a company measure the success of an innovation-led GCC?
Companies can track operational performance alongside measures such as product delivery, successful technology deployments, research milestones, system reliability, productivity improvements and contributions to global business objectives. The selected indicators should reflect the centre’s responsibilities and be supported by clear baselines.
Final Thoughts
India’s GCC ecosystem is moving beyond a model defined primarily by operating costs and delivery capacity.
The growing emphasis on AI, product development, research and global business ownership reflects a broader change in how multinational companies use their Indian operations. GCCs can now play a more direct role in building capabilities, developing technology and supporting strategic decisions.
But this transformation is not automatic. It requires the right talent, meaningful decision-making authority, investment in technology and infrastructure, and a clear connection between the centre’s responsibilities and the parent company’s objectives.
For businesses planning to establish a GCC in India, the opportunity is to design the right operating model from the outset. That means considering not only how the centre will launch, but also how it can develop new capabilities and support the company’s future growth.
Workplace planning is part of that decision. The office, infrastructure and location should support the centre’s intended functions while allowing the business to adapt as its workforce and responsibilities expand.
Explore Flexo’s complete guide to setting up a GCC in India to understand the broader setup process, location considerations and workplace strategy.
