Global Capability Centres (GCCs) are emerging as a strong challenge for India’s top IT companies, as more global firms choose to manage their own technology operations instead of outsourcing. This shift, which began a decade ago, is now accelerating and hurting both revenues and talent pipelines for Indian IT giants.
In 2015, under its then leadership, Infosys invested in a company that helped foreign businesses set up tech hubs in India. At the time, a few large clients, such as Bank of America and Procter & Gamble, had already started insourcing. By 2016, UBS and others were setting up their own centres in India. Covid and the rise of remote work further sped up this trend.
GCCs have been growing faster than traditional IT firms, with their revenue increasing at 11% annually since 2015, compared to 8% for the top five Indian IT companies. Their share in IT exports rose from 18% in 2015 to 23% in 2023. India now has about 1,700 GCCs employing two million people, with two new centres opening every week last year.
These centres are taking away both business and skilled employees from Indian IT firms. For example, the Commonwealth Bank of Australia once had 2,500 TCS staff working on its projects but later set up its own GCC with the same headcount, cutting TCS’s team down to 500.
Higher salaries, better work-life balance and attractive career prospects are drawing talent towards GCCs. Entry-level pay at GCCs is double that of IT services companies, with 30% salary jumps and better increments luring experienced engineers.
The shift is also linked to the evolution of technology. Clients now prefer agile, fast-paced innovation over the traditional waterfall delivery model. Many IT companies were slow to adapt, making GCCs the preferred choice for high-value work.
To respond, Indian IT firms are offering GCC-as-a-service models, hiring top leaders to build this business. Analysts expect that by 2028, over half of their revenues could come through GCC partnerships. However, uncertainty around potential US trade actions could impact both GCCs and IT companies, especially if services face tariffs.
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