India’s Global Capability Centers (GCCs) are entering a transformative phase that extends beyond mere outsourcing and back-office functions. This new phase is particularly evident in Tier-2 cities, which were previously dominated by metropolitan hubs such as Bengaluru, Hyderabad, and Pune. Cities like Coimbatore, Bhubaneswar, Indore, and Ahmedabad are now becoming the next growth areas for GCCs, fueled by global business leaders’ demands for innovation, agility, and cost-effectiveness. Industry experts highlight two main drivers of these developments: the integration of disruptive technology and the emergence of high-caliber external talent.
With technological advancements spreading throughout these cities and a workforce that is becoming increasingly skilled in areas like AI, machine learning, and automation, Tier-2 cities are now ideally positioned to foster high-level enterprise innovation. “AI and other advanced technologies are transforming India’s GCCs from mere outsourcing solutions into innovation powerhouses and centers of excellence. This shift is propelled by deep expertise in AI, including generative AI, data science, machine learning, and automation technology, cementing India’s status as a leading global hub for enterprise AI expertise. The essential skills in demand today include programming, AI/ML model development, prompt engineering, enterprise capabilities, and data analytics. Key technologies that enable GCC potential encompass generative AI models, cloud modernization, automation tools, DevOps, and cybersecurity.
GCCs are now spearheading AI centers of excellence, facilitating quicker product design, enhancing customer experiences, and scaling intelligent automation. This new wave of talent and technology positions India’s GCCs to spearhead strategic AI initiatives and intellectual property development. Concurrently, impactful enterprise innovation is elevating India to a globally recognized leader in innovative capabilities within the GCC ecosystem, focusing on high value creation and innovation that transcends mere cost advantages,” explains Kalyan Kolachala, MD of SAIGroup. “As India’s GCC landscape transitions to its next phase, a powerful blend of talent and technology is reshaping global enterprise growth.
What began as cost- and process-oriented delivery hubs has evolved into strategic, multifunctional centers of innovation, now propelling AI adoption, data-driven decision-making, and comprehensive product development for international organizations,” states Saket Newaskar, Director & Head of AI Transformation at Expleo. “Looking forward, the next phase of GCC growth will be characterized by two interconnected forces. First is the emergence of sophisticated talent—engineers, data scientists, domain specialists, and global leaders capable of shifting from executing tasks to formulating strategies and managing profit and loss. India’s capacity to cultivate such talent, not just in metropolitan areas but increasingly in Tier-2 and Tier-3 cities, enables GCCs to scale effectively and sustainably,” Newaskar adds.
Current statistics underline this shift, with India accounting for over 50% of all new GCCs established globally today, and the sector projected to grow at an annual rate of 11–13%, reaching $100 billion by 2030. The digital-native talent pool, approximately 70% of whom are under 35, provides a unique advantage in driving innovation at scale. Aditya Joshi, COO of SA Technologies, remarks, “Indian Global Capability Centers (GCCs) are undergoing a significant transformation, with the next generation of talent and technology marking the inception of GCC 2.0.” Presently, more than half of new GCCs emerging worldwide are based in India, and the ecosystem is anticipated to grow to $100 billion by 2030, expanding at an annual rate of 11-13%.
GCCs have transitioned from being cost-effective delivery mechanisms to becoming strategic innovation centers, leading advancements in AI, cloud computing, data management, and automation. With a digitally proficient workforce, where nearly 70% of employees are under 35 years old, India is at the forefront of global transformation. In the realm of GCCs, we view GCC 2.0 as the fusion of digital capability and domain expertise, which empowers enterprises to innovate more rapidly, scale intelligently, and maintain enduring leadership. This transformation marks a significant milestone for India’s Tier-2 cities, which are now recognized as strategic players in the global innovation landscape. With strong academic institutions, advancing digital infrastructure, and government-backed incentives, these cities are creating an ideal environment for GCCs to flourish.
As multinational companies ramp up their digital ambitions, the distributed innovation model driven by Tier-2 hubs will significantly influence the future trajectory of India’s GCC growth. The synergy of local talent and global technology is not only enhancing operational excellence but also positioning India as the world’s leader in innovation-driven GCCs.
