Bengaluru: What is common among 3M, Airbnb, Lowe’s, Zoom Video Communications, Pratt & Whitney, Tredence, Rolls Royce, Bosch Global Software Technologies?

These all are part of over a dozen global multinationals which have set up global capability centres (GCC) in Chennai, Bengaluru or Pune in the last month or two. Apart from these, India has seen a rush of top-level global executives, from companies such as Tesco, Coinbase, Intel and Honeywell, visiting the country to execute their expansion plans.

Market estimates suggest that close to 60 new GCCs had come up in India in the last calendar year. The Indian government, along with industry body Nasscom, is expecting 500 unique companies to establish such centres in India by 2025. According to a Nasscom-Deloitte report, only 25% of Fortune 500 and 15% of Fortune 2000 companies had a presence in India through GCCs — this indicates a large headroom for growth.

But what is the reason behind the sudden surge in GCCs?

“Post Covid, there has been a higher focus on digitisation and automation globally for which MNCs have been looking at GCCs or partner firms to meet the growing demand. And, most countries have seen an increase in resignations during Covid and firms have been looking to tap talent across regions and models,” Gaurav Gupta, partner and GCC leader, Deloitte India, told ET.

Companies are expanding their ecommerce and digital channels as a part of their business continuity plans as pandemic-related lockdowns had disrupted traditional models of business, experts said. According to them, easing of Covid-related restrictions led to the flurry of top-level executive visits and subsequent expansion announcements.

Last month, US retailer
Lowe’s announced its second centre in Bengaluru to meet growing demand, as its online sales have more than doubled over the last two years. The company’s India associate count has grown 60% during the Covid-19 pandemic to more than 3,600.

Bosch’s technology arm, Bosch Global Software Technologies, announced a 1,500-capacity centre in Pune that will play a pivotal role in building connected products and solutions for automotive and digital core domains. Aviation engine maker Pratt & Whitney plans to hire 160 aerospace analysts and data scientists to streamline its supply chain operations, procurement and digital analytics. UK retailer Tesco’s Group CEO Ken Murphy told ET that its team in global business services in Bengaluru would help the company in becoming more digital and cost efficient.

Companies are also exploring alternative operating models as reduced demand or pricing pressures in a few industries are impacting their margins.

“In 2016-18, India became the test bed for development and strategy for mainly global ecommerce, retail and FMCG majors. India gave them the ability for low-cost experiment and failure and the rewards were high if it succeeded. Post Covid-19, this model has accelerated,” KS Vishwanathan, vice president (industry initiatives) at Nasscom, told ET.

“Earlier, a large bank would have outsourced a back-office function to India. Now, they are going to the front offices. India is working with data analytics, drawing insights and responding to the customer proactively,” he added.

According to Deloitte and Nasscom’s ‘GCC value proposition for India’ report, India had become home to capability centres of around 1,300 global organisations, directly employing more than 1.3 million people and generating about $33.8 billion in revenue in FY20.

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