Global Capability Centres (GCCs)
Indian Economy
- PYQs7
- Articles1
Background
GCCs represent a significant and growing segment of India's services sector, contributing to economic growth, employment generation, foreign exchange earnings, and digital transformation. Their growth highlights India's position as a global talent hub and the role of state policies in attracting investment, making them relevant for questions on economic development, employment, and federalism.
Global Capability Centres (GCCs) are integral parts of multinational corporations, functioning as offshore extensions of their global operations to provide expertise across various functions like IT, R&D, customer support, and business operations. They differ from traditional third-party outsourcing by being wholly owned and operated by the parent company, aiming for cost efficiencies and leveraging local talent pools.
Facts & tables
- Number of GCCs in India
- Over 1,700 (as of Dec 2025, GoI report)
- Employment generated
- 19 lakh people (as of Dec 2025, GoI report), projected to reach over 28 lakh by 2030
- Revenue growth
- From $40.4 billion (FY19) to $64.6 billion (FY24), projected to reach $105 billion by 2030
- Key operational areas
- Cybersecurity, supply chain management, cloud computing, AI/ML research, R&D, customer support
| Feature | Global Capability Centres (GCCs) | Traditional Outsourcing (BPOs) |
|---|---|---|
| Ownership | Integral part of parent company | Operated by third-party vendors |
| Strategic Role | Drives research, design, development; extends core expertise | Primarily cost-efficiency focused; transactional tasks |
| Talent Integration | Employees feel part of global team, build product capabilities | Focus on process execution, less on strategic integration |
| Type | Reference |
|---|---|
| Conceptual area | Indian Economy |
| Conceptual area | Macroeconomic Trends & Inflation |
| Conceptual area | Labor & Demographic Economics |
| Conceptual area | Emerging Information Technologies |
| Body | Role |
|---|---|
| Government of India | Formulates policies, provides reports |
| Telangana State Government | Attracts investment, provides infrastructure |
Prelims angle
Prelims angle: Multi-statement analysis
Prelims angle: Conceptual understanding
- GCCs are captive units of MNCs, not third-party vendors, performing strategic functions.
- India hosts over 1,700 GCCs, employing 19 lakh people, with significant revenue growth.
- Key drivers for GCC growth in India: talent pool, tech ecosystem, infrastructure, policy support.
- Contribute to economic growth, employment, and digital transformation.
- Impacted by AI, leading to reorientation of hiring strategies and demand for new skills.
| Year | Framing tags |
|---|---|
| 2022 | Multi-statement analysis, Conceptual understanding |
| 2021 | Multi-statement analysis, Conceptual understanding |
| 2020 | Multi-statement analysis, Conceptual understanding |
| 2018 | Conceptual understanding, Terminology-based question |
| 2018 | Cause and effect relationships, Conceptual understanding |
| 2017 | Multi-statement analysis, Factual recall |
| 2015 | Factual recall, Institutional roles and functions |
Timeline
-
Indian Economy
Conceptual area
-
Macroeconomic Trends & Inflation
Conceptual area
-
Labor & Demographic Economics
Conceptual area
-
Emerging Information Technologies
Conceptual area
-
Prelims 2015
Factual recall, Institutional roles and functions
-
Prelims 2017
Multi-statement analysis, Factual recall
-
Prelims 2018
Conceptual understanding, Terminology-based question
-
Prelims 2018
Cause and effect relationships, Conceptual understanding
-
Prelims 2020
Multi-statement analysis, Conceptual understanding
-
Prelims 2021
Multi-statement analysis, Conceptual understanding
-
Prelims 2022
Multi-statement analysis, Conceptual understanding
-
A new identity for Hyderabad
Global Capability Centres (GCCs) are captive units of multinational corporations in India, driving innovation and core business functions. They are a major contributor to India's services sector, employment, and economic growth, attracting significant investment due to a strong tech ecosystem, talent pool, and conducive policies.
See also
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Past papers
2015–2022 · 5 questions
In the news
A new identity for Hyderabad
Global Capability Centres (GCCs) are captive units of multinational corporations in India, driving innovation and core business functions. They are a major contributor to India's services sector, employment, and economic growth, attracting significant investment due to a strong tech ecosystem, talent pool, and conducive policies.
Try these PYQs
With reference to the Indian economy, what are the advantages of "Inflation-Indexed Bonds (IIBs)"?
1. Government can reduce the coupon rates on its borrowing by way of IIBs.
2. IIBs provide protection to the investors from uncertainty regarding inflation.
3. The interest received as well as capital gains on IIBs are not taxable.
Which of the statements given above are correct ?
Statement 1 is correct. Inflation-indexed bonds (IIBs) typically offer a fixed real rate of return above inflation. Therefore, the coupon rates on IIBs are adjusted based on changes in inflation to maintain the real rate of return. Statement 2 is correct. Inflation-indexed bonds (IIBs) provide investors with protection against inflation because their principal and interest payments are adjusted based on changes in the inflation rate. This helps investors preserve their purchasing power. Statement 3 is incorrect. Tax exemption Currently, the interest income on IIBs is taxable in India. Capital gains tax treatment on IIBs might depend on the specific holding period and type of investor.
In spite of being a high saving economy, capital formation may not result in a significant increase in output due to -
Capital formation: This refers to the net increase in the capital stock of a country, which includes physical capital (machinery, buildings) and human capital (skills, education). High savings: A high savings economy implies people are saving a significant portion of their income. Ideally, these savings are then invested to create new capital. Capital-output ratio (COR): This ratio measures the amount of additional capital needed to produce one unit of additional output (GDP). A high COR indicates that even with high savings and investment, the increase in output might be low. Hence, option D is the Correct Answer.
Increase in absolute and per capita real GNP do not connote a higher level of economic development, if -
Economic Growth vs. Economic Development: An increase in absolute and per capita real GNP signifies economic growth, which means the overall production of goods and services in a country is expanding. Economic development is a broader concept that goes beyond just increasing production. It encompasses factors like
1. Improved living standards for citizens
2. Reduction in poverty and unemployment
3. Increased literacy and education levels
4. Improved healthcare and infrastructure If poverty and unemployment are increasing even with economic growth (GNP increase), it suggests the benefits of growth are not being shared widely. This indicates a lack of true economic development.
Consider the following statements:
1. The weightage of food in Consumer Price Index (CPI) is higher than that in Wholesale Price Index (WPI).
2. The WPI does not capture changes in the prices of services, which CPI does.
3. Reserve Bank of India has now adopted WPI as its key measure of inflation and to decide on changing the key policy rates.
Which of the statements given above is/are correct?
Statement 1 is correct. As per the data given in the Economic Survey 2019-2020, the weightage of food in the Consumer Price Index (CPI) Combined is 45.9% as compared to 24.4% in Wholesale Price Index (WPI). Statement 2 is correct. The CPI measures the average change in prices over time that consumers pay for a basket of goods and services, commonly known as inflation, whereas WPI does not measure the average change in prices. Statement 3 is incorrect. In April 2014, the RBI adopted the Consumer Price Index (CPI) as its key measure of inflation. Hence, option A is the correct answer.
Which of the following brings out the ‘Consumer Price Index Number for Industrial Workers’?
The Labour Bureau, attached to the Ministry of Labour and Employment, is responsible for compiling and publishing the Consumer Price Index Number for Industrial Workers (CPI-IW) in India. This index tracks changes in the retail prices of a basket of goods and services consumed by industrial workers. It serves as a crucial indicator of inflation faced by this specific segment of the population. The Labour Bureau is responsible for maintaining:
- CPI (Industrial Workers) - CPI (Rural Labourers) - CPI (Agricultural Labourers)
Show 2 more PYQs
Consider the following statements :
1. Tax revenue as a percent of GDP of India has steadily increased in the last decade.
2. Fiscal deficit as a percent of GDP of India has steadily increased in the last decade.
Which of the statements given above is/are correct?
Statement 1 is incorrect: Tax revenue as a percent of GDP in India has not steadily increased over the last decade. It has fluctuated — for instance, it rose during periods of strong economic growth but fell during years like 2019–20 and 2020–21 (due to slowdown and the pandemic). Hence, the trend is not steadily upward. Statement 2 is incorrect: Fiscal deficit as a percent of GDP has also not steadily increased. It narrowed from around 4.5% in 2013–14 to about 3.4% in 2018–19, then spiked during the COVID-19 years (to around 9.2% in 2020–21) and has gradually declined since. Thus, there has been no steady increase over the decade.
India Government Bond Yields are influenced by which of the following?
1. Actions of the United States Federal Reserve.
2. Actions of the Reserve Bank of India.
3. Inflation and short-term interest rates.
Which of the statements given above is/are correct?
Statement 1 is correct: The Federal Reserve's monetary policy decisions, particularly regarding interest rates, can impact global capital flows. If the Fed raises interest rates, it can make US investments more attractive, potentially leading to some outflow of capital from India. This could affect demand for Indian government bonds and influence their yield. Statement 2 is correct: The RBI's monetary policy plays a crucial role in influencing Indian government bond yields. The RBI's actions like setting repo rates, open market operations, and cash reserve ratio (CRR) can affect the overall liquidity in the banking system. Higher liquidity can lead to lower yields, and vice versa. Statement 3 is correct: Inflation expectations and short-term interest rates are important factors for investors when considering the return on government bonds. Higher inflation expectations can lead investors to demand higher yields to compensate for the potential erosion of purchasing power. Similarly, short-term interest rates can act as a benchmark for bond yields. Therefore, all three factors significantly influence the yields of Indian government bonds.