Rapid growth of GCCs in India reshaping competitive dynamics for IT services firms, fostering symbiotic relationship and innovation.
| Photo Credit:
Bloomberg
Indian IT services companies are increasingly feeling the pressure from the rapid expansion of Global Capability Centers (GCCs) in India. These in-house technology hubs, established by multinational corporations, are absorbing a significant share of outsourcing work and intensifying competition for top-tier talent. Industry players, however, view this dynamic as symbiotic — with GCCs focusing on core functions, while IT services firms support them by handling non-core operations.
“The rapid growth of GCCs in India is reshaping the competitive dynamics for Indian IT services firms. While there is some overlap in talent pools and capabilities with both GCCs and IT Services firms, GCCs are primarily focused on building internal digital capabilities, R&D, and new product development— functions traditionally outsourced to Indian IT players. As more global enterprises establish their innovation hubs in India, core work related to IP, product engineering, and digital strategy is increasingly being insourced,” Nilesh Thakker, the President of GCC Business at Zinnov explained.
This shift is prompting IT services firms to evolve their offerings—from delivering commoditized services at scale to driving more outcome-linked, value-based engagements that focus on speed, efficiency, and measurable business impact.
On the other hand, new opportunities are also being created. IT services firms are increasingly playing the role of ecosystem partners—supporting GCCs in areas like automation, AI/ML, cloud transformation, cybersecurity, and even helping build initial teams. Several Indian IT firms are recalibrating their go-to-market strategies to serve GCCs as clients themselves.
Mamatha Madireddy, MD and Head of HSBC India Global Service Centres & Chairperson of Nasscom GCC Council said, “There is indeed a symbiotic relationship between GCCs and the IT services companies. They complement each other and enhance the operations of IT services companies. There is collaborative growth — market expansion, talent development, and economic contribution. IT services firms can also help GCCs be agile in responsiveness to business demand and frequent market changes. It also helps take some of the operational costs out either through automation or optimizing processes. They are not competing with each other, but working cohesively and collaboratively to focus on talent, economic contribution, and market expansion.”
According to Thakker, some Centers of Excellence (COEs) within GCCs, work hand-in-hand with service providers to pilot, test, and scale initiatives globally.
Looking ahead, a hybrid ecosystem might emerge, where GCCs will drive innovation, own customer charters, and lead product development. IT services firms will bring operational muscle, cross-domain experience, and delivery scale.
GCCs like those of Bosch, SAP, and Microsoft are pushing product-first innovation and driving transformation from within. Service providers continue domination in areas like managed services, cloud migration, and legacy modernization.
“The future of India’s tech landscape is not about domination, but orchestration — where each player brings unique strengths to the table,” he said.
However, another fear that persists is a redistribution of talent, with GCCs increasingly seen as attractive workplaces due to the nature of work –usually cutting-edge, and high ownership, along with compensation, and global exposure.
This has led to competition, especially in the mid and senior levels where leadership with a strong customer and delivery mindset is in high demand. While Entry-level talent still tends to be absorbed in large numbers by Indian IT firms, especially for pyramid-based delivery models, GCCs are ramping up graduate hiring by collaborating with external stakeholders including the academia to build early talent pipelines, Thakker noted.
Gaurav Gupta – partner and GCC industry leader at Deloitte India, commented, “Both have slightly different talent requirements. GCCs typically don’t hire many people at the junior level. But they do look at experience resources coming in from whatever area they’re planning to get into, depending on which, they could potentially hire some talent from the IT service providers. Having said that, there is enough talent floating between the GCCs also. Because of new centers being set up, there is mobility. Somebody running a GCC today could be running another tomorrow. Newer GCCs are looking at the talent pool across — not only from the IT service providers but also from the other GCCs. While there could be movement at senior levels, at junior levels, even if that is happening, it’s not a significant number.”
Published on April 21, 2025
