Time is ripe for boosting nano-GCCs in India
Global Capability Centres (GCCs) have emerged as an important fulcrum of Indian IT industry. With around 2,000 GCCs and more than $64 billion of exports, India is leading the way in the global GCC ecosystem. In addition, around two million people are working directly in these GCCs, making it one of the fastest growing job creator segments in the country. Against this backdrop, the Budget 2026 can be a gamechanger in pushing the growth further. Currently, most GCCs are concentrated in the tier-I and II cities.
Only a handful of GCCs have gone to the tier-III cities. In a practical sense, big foreign firms with thousands of technology professionals may not be keen to open their GCCs in tier-III centres. It is more suitable for nano GCCs. It means GCCs with 10-50 employees will be keener to establish technology centres in tier-III cities than investing heavily in a metro centre, where the real estate prices are sky high. These nano GCCs will be interested to enter tier-III centres if they get optimum talent in good numbers and active support from the state agencies. These centres can be opened in satellite cities, which are near to metro centres. Here, talent can be tapped from nearby centres.
In this respect, the Budget 2026 can act as a facilitator. Earlier budgets have already brought in several facilitative steps for the growth of GCCs in India. For instance, 100 per cent Foreign Direct Investment (FDI) has been allowed under the automatic route in sectors where GCCs are established like BFSI (banking, finance services & insurance), IT, technology and others. Simplified regulatory processes and digital compliance have been introduced for setting up GCCs.
Attractive financial incentives are being given to GCCs if they set up centres in Special Economic Zones (SEZs). For instance, 100 per cent tax exemption is being given to all exports done from such centres. Many states like Karnataka, Maharashtra, Andhra Pradesh, Telangana and others have come up with state-specific GCC policies. Similarly, many have been providing active encouragement to set up GCCs in their states as part of their ICT policy framework.
These are encouraging developments. Meanwhile, the central government is in the process of coming up with a National Policy Framework for GCCs. Hopefully, the Budget 2026 can provide a boost to this framework. Tax incentive for wider geographical distribution is the need of the hour. Without a robust incentive structure, foreign firms may not be keen to set up their technology captives in tier-III cities. In recent years, it has been seen that many foreign firms having presence for more than one decade or so, are expanding to other cities.
These big companies will be interested in entering small urban centres with the right amount of fiscal and monetary encouragement. Notably, many GCCs execute cutting-edge technology work from Indian centres. In the AI era, Indian centres have emerged as key innovation units for their parent firms. This should be encashed on a priority basis. If GCCs can enter small urban centres then it will not only ensure regional growth, it will also stop talent migration to metro cities.
Currently, promising talent must move to metro centres because of job opportunities and career growth prospects. If this can be available in tier-III cities, then reverse migration will happen. This augurs well for equitable distribution of wealth. Budget 2026 will be important in many ways for the Indian IT industry. At a time, the US policies are becoming restrictive in nature with global companies flocking India for setting up technology centres, significant push for GCCs through budgetary provisions is of significant importance.
