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Understanding the Rise of Global Capability Centers in India
What Are GCCs and Why Are They Growing?
Global Capability Centers (GCCs) are offshore centers that deliver services from technology development to business operations. These centers have evolved from back-office support to innovation hubs that drive digital transformation.
India leads the global GCC market due to its talent availability, cost advantages, and digital infrastructure. Companies increasingly view their Indian GCCs as strategic assets rather than just cost-saving centers.
2025 Growth Outlook
India is expected to host over 2,500 GCCs in the next 3–4 years. This expansion is driven by digital transformation initiatives and location diversification strategies as companies seek specialized talent and operational resilience.
GCC Expansion Beyond Metro Cities
Tier-1 Cities Remain Core Hubs
Bengaluru leads the GCC market with over 870 centers, followed by Hyderabad with more than 550. These cities maintain their dominance due to their established talent ecosystems, infrastructure, and technical capabilities.
These metro areas provide access to skilled professionals and international connectivity—key factors for GCCs handling strategic functions.
Tier-2 and Tier-3 Cities Are the Next Frontier
Smaller cities are gaining traction in the GCC landscape. Jaipur, Coimbatore, Vadodara, and Kochi are emerging as alternative destinations with developing capabilities.
The share of GCCs in these cities has increased from 5% in FY2019 to 7% in FY2024. This growth is supported by:
- Improved digital infrastructure
- Cost advantages compared to metro markets
- Government incentives, including those in the Union Budget 2025–26
- Less competition for talent and lower attrition rates
- Better quality of life for employees
These emerging locations offer cost-effective alternatives while maintaining access to quality talent.
What Functions Are Being Centralized in Indian GCCs?
Advanced Technology Functions
GCCs now focus on higher-value technology work that drives innovation. Functions including AI, data science, cloud computing, and blockchain account for 20–25% of GCC activities.
This proportion is projected to increase to 40–50% by 2030, reflecting the shift toward innovation. This evolution requires specialized workspaces with advanced infrastructure.
Multi-Functional and Non-Tech Operations
The GCC model now spans multiple business functions. About 90% of GCCs operate as multi-functional centers handling technology, operations, product engineering, finance, and human resources.
Non-IT roles in UX design, marketing, and specialized domains like actuarial sciences are growing. These functions are expected to reach 30% of GCC activities by 2030, requiring diverse workplace configurations.
Impact on India's Commercial Real Estate Landscape
GCCs Driving Office Market Absorption
GCCs have become the dominant force in India's commercial real estate market. In Q3 2024, they accounted for 44% of the country's total office space leasing activity.
In 2024, GCCs leased over 27.7 million square feet of Grade A commercial space. This volume returns to pre-pandemic levels and confirms GCCs' role as key drivers of India's office market.
Growing Demand for Specialized Workspaces
As GCCs shift toward innovation, their real estate requirements are changing. There is increasing demand for:
- Flexible spaces that support agile working
- Collaborative environments
- Research and development facilities
- Digitally enabled workspaces
Cities like Gurugram in the Delhi-NCR region are becoming digital workspace hubs with properties designed to meet these needs.
Shift Away from Remote Work Policies
The remote work trend is reversing in the GCC sector. Companies are implementing stricter return-to-office policies, increasing demand for physical workspace.
This shift is influencing real estate planning, with GCCs securing larger footprints for growing on-site teams. The focus on collaboration reinforces the value of in-person environments.
What CRE Decision-Makers Should Prioritize in 2025
Site Selection Beyond Tier-1 Markets
Corporate real estate leaders should evaluate emerging GCC locations beyond established hubs. When assessing alternative markets, consider:
- Talent availability for specific skill sets
- Cost differences in real estate, talent, and operations
- Infrastructure readiness, especially digital connectivity
- Local government incentives and policies
- Ecosystem maturity and support services
A data-driven approach to site selection can identify locations that balance cost advantages with operational needs.
Real Estate Fit-Outs for Future-Ready Work
As GCCs focus on innovation, workplace design becomes strategic. Priorities should include:
- Spaces for both focused work and collaboration
- Infrastructure for research and development
- Flexibility for changing team structures
- Digital enablement throughout the workspace
- Wellness features that attract and retain talent
Occupiers should invest in adaptable environments that can evolve with changing business needs.
Long-Term Portfolio Strategy
GCC expansion requires a strategic approach to portfolio management:
- Align real estate with projected functional growth and talent distribution
- Balance long-term commitments with flexibility
- Consider distribution across multiple cities to reduce concentration risk
- Integrate sustainability goals with real estate decisions
- Create scalable frameworks that support growth
Effective strategies look beyond immediate space needs to support long-term objectives through portfolio solutions.
Frequently Asked Questions (FAQs)
Why are GCCs shifting to Tier-2 and Tier-3 cities?
These locations offer cost advantages of 15–20% compared to metro areas, along with growing talent pools and less competition for skilled professionals. Government incentives and improved infrastructure have made these cities viable for GCC operations.
What types of real estate are GCCs looking for in 2025?
GCCs seek Grade A buildings with digital infrastructure, flexible layouts, and collaborative spaces. Properties that support R&D functions, sustainability goals, and modern workforce models are in highest demand.
Are GCCs returning to in-office work?
Yes, many GCCs are implementing policies that encourage on-site collaboration. While hybrid models exist, there is a shift toward increased physical presence, driving greater demand for office space.
How do GCCs impact commercial real estate leasing trends?
GCCs have become the main driver of office absorption in India, responsible for nearly half of all leasing activity in 2024. This influence is reshaping market dynamics and property specifications across major office markets.
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.
