As multinational companies expand their India operations, states are competing to position tier-II and tier-III cities as the country’s next Global Capability Centre hubs
Our Bureau
New Delhi / Mumbai
India’s Global Capability Centre (GCC) industry is entering a new phase of expansion, with state governments aggressively pitching tier-II and tier-III cities as the next destinations for multinational investments, even as industry leaders say the sector is well positioned to thrive regardless of global economic uncertainty.
At the CII GCC Summit in New Delhi, senior officials from Uttar Pradesh, Maharashtra, Bihar and Kerala outlined strategies to attract the next wave of GCC investments through policy incentives, improved infrastructure, skilled talent and artificial intelligence-led industrial ecosystems. The push reflects the rapid evolution of India’s GCC landscape beyond traditional hubs such as Bengaluru, Hyderabad, Mumbai and Pune.
Industry experts believe the sector has become one of India’s strongest growth drivers, supported by cost competitiveness, a large technology workforce and expanding capabilities in artificial intelligence, engineering research and development (ER&D), digital transformation and enterprise technology.
According to Rohan Lobo, Partner, Deloitte and Industry and Channel Leader – GCCs, the industry is uniquely positioned to benefit in both favourable and difficult global economic conditions. “If there is a significant amount of volatility… it is a driver of taking work from high expensive areas and bringing it into India where the cost savings are coming,” Lobo said on the sidelines of the summit, noting that India offers a cost arbitrage of around two times compared to higher-cost markets.
He added that strong global economic growth also benefits the sector as multinational companies increase spending on technology, research and development, artificial intelligence and digital transformation. “In either of the cases, the industry will boom,” Lobo said, describing the GCC sector as being in a “win-win situation.”
Lobo said GCCs have moved well beyond their traditional role as back-office support centres and are now handling strategic functions including AI, data engineering, enterprise technology and innovation while integrating front-office, middle-office and back-office operations for global enterprises.
Artificial intelligence is expected to automate around 15-20 per cent of current operational work carried out by GCCs. At the same time, AI is likely to generate fresh opportunities by helping organisations identify technology issues, technical debt and broken customer journeys, creating additional engineering and transformation work that could increasingly be executed from India.
He estimated that GCCs could contribute between USD 155 billion and USD 199 billion in direct gross value added over the next three to four years. Including indirect contributions from service providers, supply chains and induced economic activity in sectors such as real estate, healthcare and education, the overall economic impact could reach USD 450-600 billion.
Uttar Pradesh representative said Noida has already emerged as a major GCC hub. “As you know, UP is emerging as a leading GCC destination. Noida is already an established destination. We have almost 500 units of GCCs, 200-plus GCC companies operating there,” said Alok Kumar, Principal Secretary, IT & Electronics, Government of Uttar Pradesh.
He said Lucknow and other tier-II cities are increasingly attracting global companies because of strong policy support, modern infrastructure and a large pool of STEM graduates and technical talent.
Kumar also noted that artificial intelligence is reshaping the workforce and emphasised the need to prepare talent for evolving industry requirements.
Maharashtra is also expanding its focus beyond Mumbai and Pune. Varsha Thakur-Ghuge, Joint CEO of MIDC, said the state is promoting cities including Nagpur, Nashik and Chhatrapati Sambhaji Nagar as future GCC destinations.
“Under the leadership of our CM Devendra Fadnavis, we are now focusing on the tier-3 and tier-4 cities… We are looking forward for the good investment and next gateway for the GCC in Maharashtra,” she said.
She added that Maharashtra is offering incentives under its industrial policy, including stamp duty subsidies, while improving ease of doing business through digital initiatives. Bihar, meanwhile, has introduced its GCC Policy 2026 to attract investors. “GCCs are now likely to move to tier-two, tier-three cities to actually capitalize on the competitive edge the tier-two, tier-three cities provide,” said Kundan Kumar, Secretary, Department of Industries, Government of Bihar.
He said the state offers incentives linked to fixed capital investment, rentals and employment, along with additional benefits for companies hiring Bihar domiciles. Kumar also highlighted the state’s round-the-clock power availability supported by expanding transmission and generation infrastructure.
Kerala is positioning itself as a destination for advanced technology-led GCCs through an AI-focused industrial strategy. “Our request and the pitch to the investors has been that please see Kerala as a rural urban continuum where the quality of life is assured across the tier-2, tier-3 cities,” said Arun K. Vijayan, Director, Industries and Commerce and Managing Director of Kerala State Industrial Development Corporation Ltd.
Together, the industry outlook and the coordinated efforts by state governments point to a broadening of India’s GCC ecosystem, with emerging cities expected to play an increasingly important role in the country’s next phase of technology-led economic growth.
