Rising geopolitical tensions are beginning to impact the pace of global capability centre (GCC) expansion in India, as multinational companies reassess their investment and growth strategies.
According to a report by a research firm, 63 GCCs were set up in the March quarter, compared to 74 in the same period last year. While greenfield GCC setups increased to 28 from 24, overall project discussions have slowed following the start of the Iran conflict.
“Brownfield activity dropped 30% in Q1 2026 as macro uncertainty pushed existing GCCs to hold back on expansion,” said Gaurav Vasu, founder at the research firm. He added that if conditions stabilise, greenfield GCCs could reach 100 in 2026, nearly in line with 2025 levels.
Despite the slowdown in new setups, the overall GCC industry continues to grow in value, including revenue, scale, and capabilities. Estimates suggest the sector is expanding at 18–22% annually, with revenues expected to cross $80 billion in the last fiscal year, up from $64.6 billion in FY24. In comparison, the broader IT industry is projected to grow around 6% in FY26.
Experts highlight that the GCC ecosystem is evolving into a two-way model rather than replacing IT services firms entirely. “GCCs are creating new demand and also taking share from IT service providers,” said Pareekh Jain, CEO at a research platform.
Industry data shows that 30–50% of work moving to GCCs earlier went to IT vendors. However, 40–60% of growth is driven by new capabilities in AI, product engineering, and digital platforms, areas not previously part of outsourcing.
At the same time, IT firms continue to acquire GCC operations. Examples include acquisitions involving Wipro, Infosys, HCLTech, and Virtusa. “This is a cyclical trend,” Jain said. “Companies alternate between GCC and third-party models based on company-specific or industry-specific situations.”
Experts also noted that companies are increasingly keeping core, IP-led work in-house while relying on partners for scale and specialised capabilities. The focus has shifted from cost savings to innovation, ownership, and intellectual property.
Despite current headwinds, India remains a key destination for building technology, R&D, and AI-driven centres, reflecting a growing balance between insourcing and outsourcing models.
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