India’s GCC boom sees states compete for AI innovation talent

India’s rise as a global knowledge hub has accelerated with the growth of global capability centres (GCCs). Once seen largely as cost-arbitrage back offices, GCCs now operate as integrated global hubs driving R&D, artificial intelligence, product engineering, advanced analytics, cybersecurity and intellectual property (IP)creation. For multinational corporations, India is no longer merely an efficiency destination; it is increasingly a strategic innovation base.

This transformation has triggered intense competition among Indian states. Rather than competing only on cost, states are developing targeted GCC policies that offer capital subsidies, payroll support, regulatory fast-tracking and infrastructure incentives to attract high-value operations. These measures are creating a competitive ecosystem that is reshaping India’s position in global business architecture.

India reforms drive GCC growth

Central and state-level reforms underpin this growth. Compliance rationalisation, labour code modernisation, digitised single-window clearances and sector-specific incentives have reduced operational friction. State policies combine fiscal incentives such as land and capital subsidies with non-fiscal support including 24/7 operational permissions and faster approvals.

This alignment of national reforms and state initiatives has created a stable platform for global enterprises seeking long-term operational certainty.

Indian states compete for GCCs

Karnataka. Karnataka’s GCC Policy (2024-2029) targets 500 new GCCs and 350,000 jobs by 2029. Incentives include R&D grants of up to INR500 million, rental reimbursements up to 50%, EPF support and a 45-day approval timeline. Additional incentives encourage expansion beyond Bengaluru into cities such as Mysuru and Mangaluru.

Tamil Nadu. Although not operating under a standalone policy, Tamil Nadu integrates GCCs within its broader R&D ecosystem. The state offers land cost incentives up to 50% (for up to 8 hectares), reimbursements for IP filings and certifications, electricity tax exemptions and training stipends. By treating GCCs similarly to engineering R&D centres, the state is positioning itself as an innovation destination.

Maharashtra. Maharashtra’s Global Capability Centre Policy (2025) aims to attract 400 new GCCs and generate 400,000 high-skilled jobs. With the emphasis on AI and machine learning, the state offers capital subsidies, payroll assistance, R&D grants, interest subsidies and flexible operating conditions. Cluster-based development in sectors such as aerospace, automotive and IT strengthens its industry focus.

Telangana. Anchored by Hyderabad, Telangana continues to consolidate its role as a major GCC hub. Targeting 120 new GCCs by 2026, the state emphasises high-end R&D and AI-driven operations. Incentives include land subsidies, electricity benefits and employment-linked support.

Delhi NCR. Led by Gurugram and Noida, it operates under the Haryana GCC Policy (2025) and Uttar Pradesh’s Invest UP framework. Incentives include land subsidies of 30-50%, capital subsidies up to INR250 million, payroll and EPF reimbursements, stamp duty exemptions and 24/7 operational approvals.

Emerging contenders. States such as Gujarat and Madhya Pradesh are introducing GCC-focused policies emphasising capital support and payroll incentives while encouraging expansion into tier-2 cities. Eastern corridors such as Kolkata are positioning themselves strategically via logistics and time-zone advantages.

India talent powers GCC expansion

India’s key strength remains its talent pool. A large, digitally skilled workforce, supported by national upskilling initiatives in AI, data science and cybersecurity, provides multinationals with specialised capabilities at scale. Competitive labour costs further strengthen India’s global appeal. At the same time, investment in digital infrastructure, data centres, fibre connectivity and modern urban infrastructure is supporting high-end operations. Industry and academia partnerships are also strengthening the talent pipeline.

India GCCs shift to innovation

India’s GCC ecosystem is moving from transactional outsourcing to strategic innovation, with projections estimating revenues of nearly USD100 billion by 2030. The combined impact of central regulatory reforms and proactive state incentives has created one of the world’s most competitive GCC environments. The next phase will involve expanding GCC activity into tier-2 and tier-3 cities, distributing economic benefits more widely while easing pressure on major metropolitan hubs. Sustaining this momentum will require continued policy co-ordination, regulatory predictability and infrastructure investment. As states refine their strategies and multinational enterprises recalibrate global operations, GCCs are emerging not merely as support centres but as a central pillar of India’s innovation-led growth.

Harvinder Singh and Avinash Kumar Khard are partners at DSK Legal