Govt eyes smaller cities for GCC growth with new incentive framework

The policy aims to extend GCC growth beyond metro hubs by offering tax breaks, regulatory clarity, and incentives for specialised centres in Tier-II and III cities

The Ministry of Electronics and Information Technology is drafting a new policy to incentivise the establishment of global capability centres (GCCs) in Tier-II and Tier-III towns and cities, The Economic Times has reported. The policy aims to build on existing state-level incentives by offering additional benefits to create a favourable environment for GCCs in non-metro regions.

 

Key highlights of the policy

The policy, expected to act as an umbrella framework, will:

 

1. Provide clarity on regulations, including transfer pricing norms.

2. Offer additional tax breaks and incentives beyond state government provisions.

3. Encourage large GCCs to set up in cities with available land for dedicated office zones.

 

4. Promote smaller GCCs in towns with limited land availability, focusing on specialised sectors such as healthcare and finance.

 

GCC industry to hit $100 billion by 2030

India is currently home to over 1,700 GCCs, which generate $64.6 billion in annual revenue and employ 1.9 million professionals, a recent Nasscom report said. By 2030, the industry is projected to grow to $100 billion, with the workforce expected to exceed 2.5 million. Advanced technologies like artificial intelligence (AI) and machine learning are expected to transform the sector, with more than 70 per cent of GCCs likely to adopt these technologies by 2026.

 

Bengaluru leads GCC hubs

Bengaluru remains India’s top GCC hub, employing 36 per cent of the workforce, particularly in high-tech and BFSI (banking, financial services, and insurance) sectors. Mumbai and Pune together account for 31 per cent, driven by high-tech and automotive industries. Delhi-NCR makes up 22 per cent, while Hyderabad accounts for 14 per cent, both led by high-tech and automotive sectors. 

Boosting smaller cities

While GCCs in India are growing steadily, the government aims to target smaller towns and cities to ensure inclusive growth. Dedicated office spaces and incentives tailored to specialised GCCs are expected to attract investments and diversify India’s GCC landscape beyond major metropolitan hubs.