Artificial intelligence is reshaping the role of global capability centres in India, automating transactional work while pushing GCCs towards higher-value functions such as research and development, analytics, decision-making and enterprise strategy. In an interaction with BW Businessworld, Dr Sanjeev Rastogi, Head – Policy, Adani Enterprises Limited, discusses how AI will transform GCC operations, the growing role of tier-II cities, the sectors attracting investment and the policy changes needed to strengthen India’s position as a global GCC hub.
How is artificial intelligence changing the role of GCCs in India?
AI has started impacting GCCs in a significant way. It will automate a large part of transactional work, with some processes retaining a human in the loop or a human supervising the system. Based on what we have seen, around 70-80 per cent of transactional processes could eventually be automated, particularly across finance, human resources and procurement.
What will remain with GCCs is higher-value work. They will increasingly become centres of excellence in areas such as judgment, analytics, data, information, insights and decision-making. Entry-level transactional work could see 80-85 per cent automation over time. GCCs will instead lead innovation, influence enterprise strategy, implement those strategies and become value centres rather than cost centres.
What will drive the next phase of GCC growth in India?
The next phase will be driven by centres of excellence, engineering, research and development, digital transformation, analytics and new operating models. India has already taken a lead in several of these areas. We are seeing more engineering hubs, innovation centres, AI capabilities and R&D facilities being established in the country.
India currently has around 1,800 GCCs, and approximately 25 per cent of them already operate as centres of excellence or specialised engineering and R&D hubs. This share will continue to increase. By 2028-30, I expect around 40-45 per cent of new GCCs entering India to be focused on R&D, engineering, automation and other specialised capabilities.
Are tier-II cities ready to become the next GCC hubs?
Yes. Talent is now more widely distributed, particularly after the Covid-19 pandemic. The talent base in tier-II cities has matured, infrastructure has improved and the cost of operating in tier-I cities has increased substantially. Mobility patterns have also changed. Many professionals returned to their hometowns or moved to tier-II cities after the pandemic. As a result, talent availability is no longer as concentrated in the traditional metropolitan centres.
A large share of the GCC expansion after the pandemic has moved towards emerging cities. Locations such as Ahmedabad, Pune and Hyderabad have become important GCC hubs, and this trend is likely to continue.
Which sectors are witnessing the strongest GCC investment?
Technology, banking and financial services, life sciences, healthcare, R&D and manufacturing-linked functions are witnessing strong investment. Life sciences and healthcare are particularly strong. A recent study indicated that many of the world’s leading life sciences companies now operate GCCs in India. BFSI continues to be a major contributor, with a significant amount of innovation and modernisation of operations taking place from India.
Cybersecurity and fintech transformation are also emerging as strong areas. GIFT City in Ahmedabad is a good example, with companies taking up significant space to establish capabilities in financial services and related areas. Manufacturing and healthcare will also continue to gain share, in addition to the engineering and R&D-led GCCs already operating in India.
How are GCCs evolving from cost centres to innovation and product hubs?
Cost centres represented the first phase of the GCC journey, when companies primarily benefited from labour arbitrage. That model is now changing. As AI automates many entry-level and transactional roles, companies are looking to India for mid-level and senior talent. In many cases, this talent is available at costs comparable to or lower than other global markets.
Higher-value work in engineering, R&D, innovation, AI implementation, technology and cybersecurity is increasingly coming to India. These functions require mature and highly skilled talent and create direct value for the enterprise. The future of GCCs is therefore no longer about cost arbitrage. It is about the value they can create and how they can support the implementation of enterprise strategy. GCCs will become knowledge centres, innovation centres and enterprise transformation hubs. They will play a much larger role in changing business models and driving enterprise-wide innovation.
What is the biggest challenge facing the growth of GCCs in India?
Talent is not the biggest issue across all functions, although high attrition continues to be a concern in some areas. For transactional functions such as HR, finance and procurement, India has a sufficiently large and mature talent pool. The bigger challenge lies in specialised areas such as AI, deep technology and cybersecurity, where the available talent pool remains limited.
However, this gap is narrowing, and I expect the talent base in these areas to mature over the next few years. The more important requirement is to build stronger links between academia, industry and policy. Graduates should be prepared for GCC roles before they leave engineering colleges, universities or management institutions.
Companies currently invest considerable time and resources in making graduates corporate-ready. This transition from campus to corporate needs to begin much earlier. Industry and academia should work together to incubate talent during the final year of education so that students enter the workforce job-ready. Industry bodies such as Nasscom have taken several steps in this direction, but these initiatives need to be scaled significantly. The policy framework is positive and encouraging. With deeper partnerships between the government, companies and academic institutions, India can create a sizeable pool of specialised talent over the next two to three years.
What policy or ecosystem changes could further strengthen India’s position as a global GCC hub?
India already has enough proof points, case studies and successful business models to demonstrate the value created by its GCC ecosystem. However, these success stories are not showcased aggressively enough. India has a large startup ecosystem, a growing base of AI startups and several successful engineering, automotive, R&D and innovation-focused GCCs. We need to give these centres greater visibility and promote their achievements internationally.
Doing so will attract more global companies to India. Word of mouth is already helping, and several European and engineering-led companies are setting up centres here. The next opportunity is to attract more AI-led innovation work. India is currently stronger in execution than in original innovation in some emerging areas. That is beginning to change, but the transition will take time.
A significant amount of AI innovation is still taking place in the United States and other mature markets. India must gradually move from being primarily an execution centre to becoming a global innovation and knowledge hub. |
