India’s reputation as the world’s “back office” has long been established, with Tata Consultancy Services (TCS) being a prime example. However, the rise of global capability centers (GCCs) is changing this perception. These centers, where multinational companies handle complex tasks ranging from design to research, are reshaping India’s role in the global economy.
India currently hosts approximately 1,600 GCCs, with companies like Amazon and Goldman Sachs making significant investments in the country. As new GCCs are being established at a rapid pace, it raises the question of whether India will see the emergence of its own global companies that will eventually outshine the traditional back-office firms.
Despite this, the IT sector in India continues to be a major player, bringing in around $250bn in revenues annually, accounting for 7% of the country’s GDP. With Amazon’s largest office located in Hyderabad and a substantial portion of Goldman Sachs’s workforce based in India, it is evident that the country is becoming a hub for global operations. Additionally, India boasts a significant number of chip designers, with one-fifth of the world’s experts in this field based in the country. The rapid expansion of GCCs in India signals a shift towards a more diversified economy, with the potential for homegrown companies to emerge as global players in the future.
In recent years, India has been making strides to become more than just a back-office hub by investing heavily in education and research and development (R&D). The government has launched several initiatives such as Make in India and Atmanirbhar Bharat Abhiyan aimed at promoting entrepreneurship and innovation within Indian businesses.
The emergence of GCCs also presents both opportunities and challenges for Indian businesses. On one hand, these centers provide access to cutting-edge technology and expertise that can help Indian companies stay competitive globally. On the other hand, they also pose stiff competition for local firms that may struggle to compete on cost or quality.
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