States in a Race to Lure Companies With Favourable GCC Policies

The recent developments around H1-B visa have redrawn the focus on global capability centres (GCCs) as they fuel India’s growth towards becoming a global hub for technology and innovation.

The visa fee hike may be seen as a deterrent for mobility into the US, but it is a historic opportunity for India’s services and GCC ecosystem, according to some.

“We expect MNCs to increase their reliance on GCCs and IT services firms in India, which remain a cost-effective option even after factoring in a 25% cess,” Xpheno co-founder Kamal Karanth told AIM.

With over 1,700 GCCs employing nearly 2 million professionals across the country and generating $64.6 billion in revenue, states are racing to attract these high-value centres through policy-led incentives.

The Maharashtra cabinet recently approved a policy aimed to establish 400 new GCCs and generate 400,000 high-skilled jobs through industry-integrated curricula, cutting-edge research, and workforce upskilling.

The policy envisions development of world-class business districts and a comprehensive digital data bank. Emphasising balanced, technology-driven growth, the initiative targets tier-2 and tier-3 cities such as Nashik, Nagpur, and Chhatrapati Sambhajinagar, in order to create new economic hubs across the state.

Incentives include one-time capital subsidies ranging from Rs 10 crore to Rs 50 crore, as per the size of units, along with additional support covering rent reimbursement, green certification, patent filing, and R&D grants.

The policy will remain in effect for five years (FY 2029–30) or until a new policy is notified. To ensure alignment with regional economic priorities, global business trends, and sector-specific workforce requirements, the government will establish the Maharashtra GCC Growth Council as an advisory body and a think-tank.

Other States’ Plans

Several other states have either announced or are finalising GCC policies to attract multinational corporations, foster innovation, and create high-skilled jobs.

Telangana is focusing on emerging technologies, innovation hubs, streamlined regulatory processes, and talent skilling to support new GCCs. Karnataka’s 2024–2029 policy targets 500 GCCs and 350,000 jobs, offering internship reimbursements, tax exemptions, and the development of Global Innovation Districts in Bengaluru and tier-2 cities.

Gujarat provides capital and operational subsidies, employment incentives, EPF and power tariff reimbursements, and support for R&D and patent filing. Madhya Pradesh emphasises plug-and-play infrastructure, payroll and capital incentives, and IT, finance, and engineering sectors.

Meanwhile, the Kerala government is about to release GCC policy this year, focusing on high-tech manufacturing, R&D, reverse migration, and sustainable innovation hubs. Currently, Kerala hosts 40 GCCs and aims to expand this number to 120 by 2030, with the goal of increasing employment from 40,000 to 200,000 jobs.

Rajasthan incentivises infrastructure and skill development, integrating GCCs with local innovation ecosystems. Haryana plans incubators, plug-and-play workspaces, and semiconductor-focused initiatives.

Andhra Pradesh, too, recently announced the formation of a 360-degree GCC advisory council.

Uttar Pradesh currently has 63 incubators across 23 districts and 08 Centres of Excellence (CoEs) focused on sectors such as AI & ML, blockchain, 5G/6G, drones, MediElectronics, and health informatics. Tamil Nadu is designing a GCC framework emphasising IT, automotive, renewable energy, and R&D support.

However, the companies look beyond the subsidies when zeroing in on a state for their GCCs.

“It’s about specialisation. We are seeing states create unique value propositions tailored to specific business needs,” said Alouk Kumar, founder and CEO, Inductus Group, a firm offering strategic advisory and consulting services.

For instance, a company focused on large-scale, cost-effective operations might find an ideal partner in Uttar Pradesh due to its strong financial incentives. In contrast, a firm leading AI research would be drawn to Karnataka’s thriving innovation ecosystem.

Meanwhile, a business pioneering hybrid work models would find a natural fit with Andhra Pradesh’s forward-thinking policies that support distributed teams. This growing specialisation is the hallmark of a maturing, sophisticated market, Kumar said.

One of the challenges faced by GCCs is talent shortage. Nipun Sharma, CEO Teamlease Services, said that “policies that only incentivise infrastructure and expansion will not be enough to tackle the real challenge, that is talent readiness.”

India does not face a shortage of graduates, but of job-ready professionals. Unless these policies embed strong apprenticeship models, work-integrated learning, and industry-academia linkages, the talent shortage will continue to limit GCCs’ growth potential.

GCCs are expected to create over 1.2 million new tech jobs by 2027, contributing to the 4.7 million new tech jobs anticipated nationwide. Unless the talent pipeline is future-ready, this demand-supply mismatch will persist.

In essence, the old model — GCCs concentrated in a few major cities — is giving way to a more distributed network driven by the ambitions of individual states. Kumar mentioned that this shift has sparked a new era of “competitive federalism,” where states are developing unique strategic identities to attract global investment.

Kumar also noted India’s ambition to be both a digital sovereign nation and the world’s most attractive hub for GCCs has created a complex policy environment.

While the DPDP Act brings India closer to global standards like GDPR, it also introduces friction through stricter consent mandates, cross-border transfer uncertainties, and heavy penalties for Significant Data Fiduciaries.

Similarly, policies such as CERT-In’s six-hour cybersecurity reporting rule, GST-linked e-invoicing requirements, and rigid SEZ/OSP regulations add operational burdens that disrupt global standardisation, he said.

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