Share this article
The Strategic Role of GCCs in 2025
Global Capability Centers (GCCs) have evolved from basic support units into strategic hubs that drive innovation and digital transformation. As their importance grows, the decision about where to locate your GCC has become increasingly critical.
Your location choice directly impacts:
- Access to specialized talent pools
- Operational costs and financial sustainability
- Ability to scale operations as needs evolve
- Integration with global business functions
A well-planned GCC location strategy aligns with your business objectives while optimizing costs and operational efficiency.
What's Driving Location Decisions Today
Several key factors are influencing GCC location decisions in 2025:
- Cost pressure in Tier-1 markets: Traditional hubs like Bengaluru and Mumbai face rising real estate costs and wage inflation
- Demand for diverse skill sets: Different functions require specialized talent that may be concentrated in specific cities
- Government incentives: State-level policies offering tax benefits and streamlined approvals
- Real estate availability: Access to appropriate office space with growth potential
- Infrastructure quality: Digital connectivity, transportation, and power supply reliability
Companies are increasingly adopting distributed models that balance established hubs with emerging locations to optimize their GCC footprint.
Evaluating India's Top Tier-1 Cities for GCC Setup
Bengaluru – India's GCC Epicenter
Bengaluru hosts over 50% of India's GCC population, making it the undisputed leader in this space.
Key advantages:
- Premier engineering talent from institutions like IISc and IITs
- Well-developed technology ecosystem with supporting vendors and partners
- Strong innovation capabilities and startup culture
Focus areas: AI/ML, software development, cybersecurity, product engineering
Considerations: Rising costs, increasing competition for talent, and infrastructure challenges during peak hours
Hyderabad – A Fast-Rising Tech Destination
Hyderabad has emerged as a strong alternative to Bengaluru with competitive costs and business-friendly policies
Key advantages:
- Lower operational costs compared to Bengaluru
- Presence of global R&D hubs and Fortune 500 companies
- Proactive state government policies supporting GCCs
Focus areas: IT services, engineering services, research operations
Considerations: Growing rapidly but still building depth in specialized talent areas
Pune – A Stronghold for IT and Automotive GCCs
Pune offers a strong value proposition with a consistent talent pipeline and more affordable operations.
Key advantages:
- Strong educational institutions producing quality talent
- Lower costs than Mumbai with similar access to talent
- Established IT hubs like Hinjewadi with appropriate infrastructure
Focus areas: Automotive R&D, engineering services, software development
Considerations: Transportation infrastructure needs improvement
Chennai – Port Access and Industrial Depth
Chennai combines manufacturing heritage with growing technology capabilities.
Key advantages:
- Cost-effective workforce with strong technical skills
- Good infrastructure with seaport access
- Stable talent pool with lower attrition rates
Focus areas: Logistics, automation, IT operations
Considerations: Cyclone risk during monsoon season
Delhi NCR (Noida & Gurugram) – Corporate Proximity and Connectivity
The National Capital Region offers strategic advantages for certain functions.
Key advantages:
- Proximity to regulatory bodies and government institutions
- Metro connectivity and international airport access
- Diverse talent across industries
Focus areas: Financial services, e-commerce, regulatory functions
Considerations: Air quality concerns and higher living costs
Mumbai – Financial Hub with Global Access
Mumbai remains the financial capital with specialized capabilities for BFSI sectors.
Key advantages:
- Concentration of financial institutions and supporting services
- High-quality talent in financial areas
- Premium office space with international standards
Focus areas: Banking, financial services, insurance
Considerations: Highest real estate costs in India; commute challenges
Top Emerging Tier-2 Cities for GCC Expansion
Indore – Central India's Cost-Effective Tech Hub
Indore has emerged as a viable GCC destination with growing IT presence.
Key advantages:
- Presence of major technology companies like TCS and Infosys
- Strong educational institutions including IIM Indore
- Significantly lower real estate and operational costs
Focus areas: IT services, software development, BPO operations
Considerations: Still developing depth in specialized technical skills
Coimbatore – Engineering Talent Meets Operational Efficiency
Coimbatore offers a compelling combination of technical skills and cost advantages.
Key advantages:
- Long-standing manufacturing base with engineering expertise
- Expanding IT sector with dedicated technology parks
- Lower operating costs and less competition for talent
Focus areas: Finance, IT operations, engineering services
Considerations: Limited international connectivity
Bhubaneswar – Government-Backed Tech Growth
Bhubaneswar is developing quickly with strong government support.
Key advantages:
- Special Economic Zones with infrastructure support
- Policy incentives for technology companies
- Affordable real estate and living costs
Focus areas: IT engineering and support services
Considerations: Still building technology ecosystem depth
Ahmedabad (GIFT City) – India's Emerging Fintech Capital
GIFT City offers unique advantages for finance-focused GCCs.
Key advantages:
- Tax benefits and regulatory incentives
- International-grade infrastructure
- Growing financial services ecosystem
Focus areas: Fintech, banking, financial services, global finance
Considerations: Specialized focus on financial services rather than broader technology
Mysuru – Affordable and Strategic "Beyond Bengaluru" Option
Mysuru provides an alternative that maintains proximity to Bengaluru's ecosystem.
Key advantages:
- High quality of life with less congestion
- Growing IT presence and government support through "Beyond Bengaluru" initiative
- Lower costs while maintaining access to Bengaluru talent market
Focus areas: R&D, tech support, outsourcing
Considerations: Still developing as a technology hub
Key Factors to Consider When Choosing a GCC Location
Talent Pool Availability
Talent access remains the primary driver of GCC location decisions:
- Tier-1 cities offer mature talent ecosystems with specialized skills and experience
- Tier-2 cities provide emerging, cost-effective labor markets with growing capabilities
- Educational institutions in proximity ensure sustainable talent pipelines
- Competitor presence affects talent competition and wage inflation
Infrastructure and Connectivity
Physical and digital infrastructure directly impacts GCC operations:
- Evaluate technology parks, SEZs, and office districts for appropriate facilities
- Assess digital connectivity, power reliability, and backup systems
- Consider transportation access for employees including metro connectivity
- Review airport access for international travel requirements
Real Estate Costs and Availability
Real estate is a significant operational expense that varies widely across markets:
- Bengaluru office rents increased approximately 20% in Q1 2025, while Tier-2 markets offer more stability
- Grade A office space availability differs across markets
- Assess scalability potential to accommodate future growth
- Consider total occupancy cost beyond headline rental rates
Policy and Regulatory Support
Government policies can significantly impact GCC operations:
- Karnataka's GCC Policy 2024–2029 offers specific incentives for technology centers
- GIFT City provides tax advantages for financial services operations
- SEZ benefits may include customs duty exemptions and tax incentives
- State-level ease of doing business varies considerably
Functional Alignment
Match city capabilities with your intended GCC functions:
- AI and advanced technology development aligns with Bengaluru's ecosystem
- Financial services operations benefit from Mumbai or GIFT City placement
- BPO and support functions may be more cost-effective in Tier-2 cities
- Engineering and manufacturing support functions fit well in Chennai or Pune
GCC Location Strategy – Recommendations for CRE Leaders
Align Site Selection with Function, Not Just Cost
A common mistake is prioritizing cost over functional alignment:
- Place high-complexity work requiring specialized talent in Tier-1 cities
- Consider Tier-2 locations for volume-based operations or niche capabilities
- Evaluate total operating costs beyond real estate expenses
- Balance employee preferences with business requirements
Build a Diversified Portfolio
A distributed approach offers advantages over single-location concentration:
- Consider a hub-and-spoke model with primary and secondary locations
- Balance talent access, cost efficiency, and risk mitigation
- Plan connectivity between locations to ensure collaboration
- Structure teams to maximize efficiency across multiple sites
Factor in Long-Term Scalability
GCCs typically expand over time, making growth potential a critical factor:
- Choose cities that can support your expansion plans
- Assess infrastructure development pipelines
- Evaluate talent sustainability over 5–10 years
- Consider ecosystem maturity and supporting service availability
Frequently Asked Questions (FAQs)
What is the best city in India for setting up a GCC?
The optimal location depends on your specific requirements. Bengaluru remains the top choice for innovation-led functions and advanced technology development. Hyderabad and Pune offer strong alternatives with more favorable costs. Tier-2 cities like Indore and Coimbatore are gaining traction for cost-effective operations with growing talent pools.
How do real estate costs vary between Tier-1 and Tier-2 cities?
Tier-1 cities have seen significant cost increases, with Bengaluru experiencing approximately 20% rent increases in Q1 2025. Tier-2 cities typically offer 30–50% lower lease rates while developing more Grade A inventory. This cost differential allows for significant operational savings in emerging locations.
What incentives are available for GCCs in India?
Several incentive programs support GCC establishment, including Karnataka's GCC Policy with tax benefits for technology centers, GIFT City's tax exemptions for financial services operations, and various SEZ incentives. State governments increasingly offer customized packages for large GCC investments.
How should companies align location with functional needs?
Innovation and R&D functions benefit from placement in Tier-1 cities with deep talent ecosystems. Cost-driven services like BPO, IT support, or finance operations can be effectively decentralized to Tier-2 cities. A distributed model allows optimization by function while maintaining operational integration.
Ready to Launch or Expand Your GCC? Let Vestian Help.
Establishing the right Global Capability Center strategy requires more than just market data—it demands real estate insight tailored to your business goals. Vestian partners with occupiers to evaluate, plan, and execute location strategies that drive performance and reduce risk.
Whether you're entering the GCC space or expanding your existing footprint, our team can guide you through every step:
- Identify locations aligned with your functional and talent needs
- Analyze costs, incentives, and infrastructure readiness
- Navigate policy frameworks and approval processes
- Execute site selection, negotiation, and occupancy planning
Connect with us today to get started on building a GCC network that supports your long-term business objectives.
