The growth of Global Capability Centres (GCCs) is expected to take a hit in the upcoming quarter, primarily due to uncertainty stirred by ongoing tariff wars. Experts predict that the first quarter of the year will likely see a sharp deceleration in new registrations for GCCs. This is primarily attributed to the global trade turbulence, exacerbated by erratic tariff policies.
As businesses navigate this unpredictable trade environment, a more cautious approach is being adopted. With the re-election of a certain global leader, new tariff policies have added further instability, causing global enterprises to rethink their strategies. “Geopolitical movements are creating a degree of near-term caution, particularly as global enterprises reassess capital allocation in an increasingly volatile demand environment. Some global HQs are taking a more measured, phased approach to GCC expansion in India – not due to a lack of intent, but as a result of more deliberate decision-making in a complex macroeconomic landscape,” said a business expert.
Research from a renowned market intelligence firm suggests a short-term dip in GCC registrations until June. However, they anticipate that by the end of the year, the number will stabilize at approximately 70 new GCCs, with over 15 new setups already recorded in the first quarter of CY25.
In the near term, the imposition of tariffs is expected to lead to rising production and operational costs. Consequently, local manufacturers, banks, and mid-market companies may prioritize cost-efficiency, which could delay their decisions to establish new GCCs, according to a business founder and expert. This delay might also affect the expansion of existing GCCs, as companies are likely to reassess their strategies in response to shifting global dynamics.
The GCC sector in India had been expanding rapidly over recent years. By 2024, the industry boasted over 1,750 GCCs, employing around 1.9 million professionals. India’s role in the global business ecosystem is now more significant, with the industry’s revenue evenly split between multinational corporations and Indian service providers.
Although the pace of new setups and expansions may decelerate, the value and complexity of work being shifted to India continues to rise. “By FY26, we expect momentum to pick up as enterprises reprioritise for resilience, innovation, and long-term transformation – all of which India is well-positioned to enable,” stated the business leader.
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