CBRE South Asia Pvt. Ltd, and Zyoin report highlights that Global Capability Centers (GCCs) have significantly amplified their Indian operations over recent decades, propelled by a skilled workforce, cost efficiency, and a conducive business climate. This GCC growth trajectory is anticipated to be concentrated in India's top six metropolitan areas, driven by their exceptional talent pools, enabling expansion and future development.
Global corporations are affirming their long-term commitment to India by securing larger office spaces for their GCCs. Nearly 53 mn. sq. ft. of office space was leased by Global Capability Centers (GCCs) between CY 2022 and the first half of 2024 across Bengaluru, Hyderabad, Chennai, Pune, Delhi-NCR and Mumbai.
During Jan-Jun ‘24, GCC leasing activity across these 6 cities increased by 8% Y-o-Y. In the first half of 2024, GCCs accounted for approximately 37% of the total office leasing activity in India. During H1 CY 2024, the share of Banking, Financial Services, and Insurance (BFSI) GCCs rose to 22%, driven by significant leases from global banking and insurance firms in Mumbai, Bangalore, and Pune. Further, over the last two-and-half years (2022-H1 2024), technology companies have leased about 15 mn. sq. ft. of office space.
Technology and BFSI corporates have historically been the primary GCC office space occupiers. However, niche firms, including hedge funds and private equity firms, are expanding, recognising the strength of India’s talent. Engineering and manufacturing (E&M) companies are expanding their footprint in India, likely influenced by supply chain diversification strategies. Life sciences GCCs, too, have exhibited an increased appetite for expansion in the country, driven by the need to digitalise services and foster product development.
CBRE and Zyoin jointly analysed a set of key GCC firms in India. As per the analysis of the workforce composition in top GCCs, engineering and information technology have emerged as the top functions comprising the largest workforce share. This has been necessitated by the digitalization efforts being undertaken across sectors. In the technology and E&M sectors, the workforce in the operations function is also seen to be prominent. Additionally, in the BFSI sector, GCCs’ workforce composition continues to be driven by the engineering + Information technology function, followed by the business development & sales function and finance function, respectively.
Further to the joint analysis, CBRE and Zyoin examined the key skill sets currently in demand, including those within installed talent as well as requirements across open job postings. Within the technology sector, knowledge of skill sets such as Java and SQL are in higher demand. Additionally, fundamental skills, including software development/coding, engineering, C, C++, Python are also coveted. Within the BFSI sector, knowledge of skill sets around banking, investing, insurance, mortgages, securities, ability to build financial models or financial statements, financial analysis, risk assessment, financial planning among others are in demand. Within the Engineering & Manufacturing sector, knowledge of skill sets around manufacturing, software development, a background in mechanical engineering is much preferred.
As per the report, global landscape, human capital and real estate are the foundational pillars of GCC prosperity in India. Approximately 1.66 million professionals are currently employed in GCCs across India. This vast and growing talent pool makes India an attractive destination for GCCs, especially considering the average salary of software professionals in India is only one-tenth of the cost in the US for similar roles. Consequently, setting up a GCC in India is significantly more cost-competitive, allowing these centers to thrive on the large and affordable tech workforce available.
As the GCC ecosystem matures, Indian tech talent is moving beyond traditional service roles and increasingly taking on product ownership. A pivotal factor in this shift has been the creation of global leadership roles within GCCs in India. This nurtures homegrown talent equipped with the vision, skills, and experience to lead global teams and initiatives.
Bengaluru has cemented its status as the leader for global capability centers (GCCs), commanding a 40% share in India’s GCC leasing market (from CY 2022 to Jun’24). The city holds the largest share of GCC talent, accounting for 34% in Jan-Jun ’24. Bangalore reigns supreme as the GCC epicenter, fortified by a dominant talent pool, a mature technology ecosystem, and a thriving start-up landscape. The city boasts a two-million-strong technology workforce, the largest in India. While technology and BFSI sectors remain the primary demand drivers, retail, aerospace, semiconductor, and life sciences companies are establishing niche GCCs. Karnataka's upcoming GCC policy is expected to catalyze GCC setups and job creation in the city.
Hyderabad has ascended to GCC prominence due to the government's proactive policy framework and efficient urban infrastructure. The city attracts talent from across the nation, offering a compelling proposition for GCCs. An enhanced lifestyle and lower costs further incentivize company setups.
Chennai has emerged as a major GCC hub, underpinned by a vibrant technology sector and robust manufacturing base. The city's educational prowess in STEM fields attracts new GCC entrants. Tamil Nadu's R&D Policy 2022 offers attractive incentives to GCCs and R&D centers. The city witnessed 6 million sq. ft. of GCC office space leases over 2023 - H1 2024, constituting 17% of total GCC leasing during this period. Beyond technology and engineering & manufacturing, global banking giants are active in the city.
Pune, historically a BFSI GCC stronghold, is experiencing renewed interest from engineering & manufacturing and technology firms. Competitive real estate costs, a cosmopolitan talent pool, and proximity to an automotive and engineering hub make Pune attractive to GCC occupiers. Led by large deals, Pune accounted for the second-highest share in GCC leasing during H1 2024.
