India’s Global Capability Centers (GCCs) Leading the AI Revolution
India has emerged as a global epicenter for technology and innovation, particularly in Artificial Intelligence (AI), with GCCs playing a pivotal role. These centers have transformed from traditional offshore delivery centers to hubs of technological innovation, leveraging AI to drive operational efficiencies and innovation.
According to a report by NASSCOM, India’s AI market is projected to grow at a compound annual growth rate (CAGR) of over 20% between 2023 and 2028, contributing nearly $1 trillion to the economy by 2025. This growth presents both a tremendous opportunity and a profound responsibility to drive ethical and inclusive AI solutions.
The World Economic Forum highlights that AI can augment human capabilities, enhancing productivity and innovation across sectors. In India, sectors such as healthcare, finance, retail, and logistics are poised to benefit significantly from AI adoption. For instance, AI-powered diagnostic tools can improve healthcare outcomes by detecting diseases more accurately and quickly. In finance, AI-driven analytics can enhance financial inclusion and risk management, while in retail, AI can personalize customer experiences and improve supply chain efficiency.
Global Capability Centres (GCCs) have played a pivotal role in India’s technological transformation, evolving from traditional offshore delivery centres to advanced hubs of innovation and business transformation. By embedding AI into their operations, GCCs can further enhance efficiency, spark innovation, and deliver exceptional value to their enterprises. Companies like Teleperformance are already leveraging AI to enhance customer interactions, predictive analytics, and personalization.
Why India is a Preferred Destination for GCCs
- Thriving AI Startup Ecosystem: India is home to over 1,000 AI startups, driving innovation in healthcare, finance, logistics, and e-commerce. Major tech hubs like Bengaluru, Pune, and Hyderabad account for 60% of these startups.
- Abundant AI Talent Pool: India boasts over 400,000 AI professionals, with 30% growth expected. Top educational institutions like IITs and universities provide highly skilled AI graduates.
- Robust Economic and Infrastructure Support: India attracted $2.5 billion in AI and emerging tech investments in 2024, with government schemes supporting innovation and growth.
GCCs in India: Driving AI Innovation
- Generative AI Adoption: According to EY, nearly 70% of GCCs in India are investing in generative AI (GenAI), with 78% upskilling teams for GenAI adoption. This shift from experimentation to practical applications of AI is focused on talent management and risk mitigation.
- AI-Powered Automation: GCCs are using AI-powered automation solutions to streamline operations, reduce costs, and enhance customer experience. Companies are leveraging GenAI to boost operations and customer experience, with 69% of firms focusing on customer experience, 57% on operations, and 47% on IT and cybersecurity.
- Talent Reskilling and Upskilling: 51% of GCCs are relying on technology rather than expanding headcount, with a clear emphasis on reskilling staff in emerging areas such as AI.
Data and analytics skills are essential to GCCs, with strong demand for these skills to be integrated into service offerings.
Priorities for GCCs
- Sustainability and Climate Change: 100% of GCCs surveyed are championing the climate change and sustainability agenda, with a focus on reducing their environmental footprint.
- Digital Transformation: 61% of GCCs want to drive enterprise-wide digital transformation, leveraging AI to enhance operational efficiency and innovation.
- Functional Capabilities: 85% of GCCs aim to expand functional capabilities, with a focus on enhancing their service offerings and improving operational efficiency.
Challenges and Concerns
- Cybersecurity and Data Privacy: The risk of confidential information leaks due to increasing cyber-attacks and data breaches is a top concern for GCCs. With prolonged hybrid and remote work expanding the attack surface, security intelligence and monitoring is a priority for 73% of GCCs.
- Tax and Regulatory Compliance: Transfer pricing continues to be a notable challenge for GCCs, with 75% highlighting the need for simplified compliance processes and 65% seeking tax benefits and incentives.
The Future of GCCs in India
As AI continues to transform industries, GCCs in India are poised to play a crucial role in driving innovation and growth. With a focus on talent reskilling and upskilling, digital transformation, and robust security frameworks, GCCs are positioning themselves as global innovation hubs.
