India’s global capability centre (GCC) story has become one of its strongest global differentiators, fueling innovation, R&D, IP creation, and strategic decision-making for some of the world’s largest multinational corporations. But a growing concern is emerging in the industry: what really qualifies to be a ‘GCC’?
Recently, State Bank of India (SBI) chairperson Challa Sreenivasulu Setty inaugurated the bank’s GCC in Bengaluru. Conceived as a centre of excellence, the Bengaluru facility will focus on building advanced capabilities across digital banking platforms, data analytics, artificial intelligence, cybersecurity, and enterprise technology support.
However, the announcement also brings into focus a broader and increasingly important question: what does the term ‘global capability centre’ actually mean?
Traditionally, GCCs refer to offshore or nearshore entities that are fully owned and operated by multinational corporations, established outside the headquarters geography to centralise and deliver critical business functions for global operations. The “global” aspect of a GCC is structural, not aspirational—it reflects a model designed to serve a foreign parent’s worldwide business mandates.
In this context, any domestic use of the GCC label raises questions around interpretation and scope. When applied to domestically headquartered institutions, the term appears to be either broadened or redefined beyond its conventional meaning, potentially blurring important distinctions in operating models, policy frameworks, and industry reporting.
In this regard, Alouk Kumar, CEO of Inductus Group, tells AIM, “We’re witnessing a concerning dilution of what ‘GCC’ actually means, and not just in semantics. It has real implications for policy effectiveness, talent positioning, and India’s competitive differentiation in the global services landscape.”
AIM reached out to SBI to seek clarity on how the bank defines its Bengaluru facility within this framework; however, the queries didn’t elicit a response.
Why ‘Global’ Matters in GCC
At its core, a GCC is not just a large technology hub or shared services operation. It has a specific strategic architecture. Kumar explains, “The ‘global’ in the ‘global capability centre’ isn’t aspirational; it’s structural.”
These centres are designed to build intellectual property, drive R&D and advanced engineering, run enterprise-wide technology platforms, and influence global business strategy from India.
This definition is echoed in state policies as well.
Karnataka’s GCC policy, for instance, explicitly defines GCCs as “Fully owned hubs by foreign-headquartered MNCs leveraging India’s talent to enhance their worldwide operational efficiency.”
The emphasis is clear: foreign parentage, global mandate, and integrated ownership.
Rebranding Without Structural Change
Despite this clarity, the GCC label is increasingly being applied far more loosely. Domestic banks like Bank of Baroda, Indian conglomerates like Tata Motors, Adani Enterprises, and ITC, and even IT services firms are rebranding delivery or captive units as GCCs largely because the term carries policy weight and talent appeal.
Kumar notes, “A state bank opening branches in India to serve Indian customers is domestic expansion. It’s not tapping into global talent pools to serve a foreign parent’s worldwide operations. The structural DNA is fundamentally different.”
This blurring of definitions is not merely cosmetic—it has tangible consequences.
One immediate impact is on talent markets.“Engineers evaluating opportunities need to understand whether they’re joining a centre that’s genuinely shaping global products and strategy, or a rebranded delivery operation with a more appealing nameplate,” Kumar points out.
Equally concerning is the effect on policymaking. The incentives, infrastructure support, and regulatory frameworks are being designed for GCC and calibrated for a specific economic activity to attract foreign multinationals to anchor high-value capabilities in India.
For instance, Telangana offers single-window clearances for all required state-level licences and approvals for GCCs, alongside targeted initiatives focused on skilling and developing local talent, while Karnataka provides financial support for workforce development by reimbursing up to 20% of skilling expenses, capped at ₹36,000 per graduate and ₹18,000 per diploma holder.
When domestic entities adopt the GCC label indiscriminately, it muddies data, dilutes policy intent, and risks misallocation of resources.
Legal Reality
Meanwhile, Salman Waris, a technology lawyer, adds an important legal perspective, clarifying that ‘GCC’ itself is not a statutory designation.
“The term ‘global capability centre’ does not have a distinct, overarching legal definition under Indian law. It is primarily a commercial or operational term used by multinational corporations,” Waris clarifies.
He further explains that while Indian companies may use the term internally, the term ‘GCC’ itself does not automatically grant benefits. In fact, the benefits are tied to the specific legal structure and location (SEZ, IFSC).
The risk of misrepresentation arises only when the label is used to imply eligibility for incentives without meeting the required legal frameworks.
Why Definitions Matter More Than Ever
However, Karthik Padmanabhan, managing partner at consulting firm Zinnov, brings the debate back to first principles. “A global capability centre is not a catch-all term for large or sophisticated tech hubs. It has a very specific meaning.”
He underscores that the single most important distinction is the relationship of the GCC to headquarters—not scale, talent quality, or global ambition. In simple terms, “You cannot be a GCC in your own headquarters country,” Padmanabhan clarifies.
Just as Google’s Mountain View campus is its headquarters—not a GCC—an Indian enterprise’s centre in India remains a corporate or R&D centre. By contrast, “Google Bangalore is a GCC because it supports a global business from outside the HQ geography, ” he explains.
India’s GCC narrative is powerful precisely because of its clarity. India is where Fortune 500 companies establish strategic capability hubs, not just offshore delivery centres. They are innovation engines, IP generators, and increasingly, strategic decision-makers for their global parents.
Kumar warns, “Singapore doesn’t call every office a ‘regional headquarter’. Ireland doesn’t label every subsidiary a ‘European centre of excellence’. The discipline in terminology reflects strategic clarity.”
Blurring definitions weakens India’s competitive position and risks turning a strategic advantage into generic jargon.
However, there is room for nuance and evolution. Kumar acknowledges that there are grey areas—such as Indian multinationals setting up regional capability hubs. But the ‘global’ qualifier must retain meaning: foreign-headquartered parent, multinational scope, and capability building beyond India’s borders.
Growing Need for Definition Discipline
Rohan Lobo, partner and GCC industry leader, Deloitte South Asia, says that as models expand and mature, so does the confusion around terminology. Multiple labels—GCC, GIC (global innovation centre), GVC (global value ventre), captive, shared services—are often used interchangeably, even though the work and intent behind them differ.
Lobo acknowledges this ambiguity, “maybe there is a little bit of definition that’s required in terms of what is a GCC, what is not a GCC, what is value-adding work, what is not value-adding work.”
Lobo believes that it is now upon the government, working with industry, to establish clarity.
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