India is witnessing a rise in mid-market firms establishing global capability centers (GCCs), with revenues projected to grow 15-20% between 2024-2026. Flexible, cost-effective models drive adoption, attracting firms from the US, Europe, and the Middle East.
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India is expected to see an uptick in mid-market firms setting up global capability centres (GCC) in the country, with revenue from this segment projected to increase 15-20% between 2024 and 2026, according to data sourced from ANSR, which helps set up these facilities.
As per industry estimates, about 45% of India’s 1,760 current GCCs are from the mid-market, defined as having a turnover of $100 million to $5 billion. They employ 220,000 people. ANSR anticipates over 120 new mid-market GCCs to be set up by next year and estimates revenues to grow from $6.5 billion in 2024 to $7.5-7.8 billion in 2026.
This segment has been growing at a fast clip. It accounted for 21% of all new GCCs in 2023, which jumped to 42% in 2024, as per data from consulting firm Zinnov. Research firm Everest Group expects 75% of the 1,200-1,250 new GCCs in India in the next five years to be small and mid-sized firms.
“The who's who (large firms) are already here… The smaller ones are the ones which will continue to come because they would not have explored the country and its advantages,” said Srikanth Srinivasan, vice president and head-membership and outreach, Nasscom.
“Mid- and small-sized companies are increasingly leveraging India’s GCC ecosystem, taking advantage of its evolved talent pool, cost efficiencies and maturing service delivery models,” said Rohitashwa Aggarwal, partner, Everest Group.
Unlike large corporations which have deep pockets and management bandwidth to set up and run their own GCCs end-to-end, these firms are seeking out alternative models such as build-operate-transfer and more partner-operated models as they are less familiar with the market, want to minimise risk and seek more cost-effective and agile setups, experts said.
Everest Group estimates that there has been an over two-fold increase in uptake of the build-operate-transfer model in the last few years and expects this to continue.
Consulting firm Inductus is receiving two enquiries per day, on average, from global mid-sized organisations to set up GCCs here, said CEO Alouk Kumar.
“We expect a 20-25% annual increase in adoption of the corporate-owned partner-operated service model,” he said, adding that this model reduces capital expenditure as well as compliance burdens for companies, while they retain control over their proprietary processes and IP. It can also make multi-city expansion easier.
In terms of operational models, mid-market GCCs increasingly favour asset-light, plug-and-play setups that allow them to scale efficiently while keeping costs manageable, said Karthik Padmanabhan, managing partner, Zinnov.
“As mid-sized firms continue to prioritise productivity, quality and faster ROI, partner-led models and flexible workspace solutions are poised to become the preferred strategy for companies looking to establish a strong and sustainable and value-driven presence in India.”
Interest is being seen from mid-sized organisations not just from the US but also across Germany, the Nordic countries and the Middle East, experts said.
Their share in terms of revenue and headcount in India’s GCC landscape will however remain 10-12% even amid the expansion, said Srinivasan.
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