The Best Cities Around the World to Set Up a Global Capability Center

Global Capability Centers (GCCs) have transcended how companies operate overseas in the new globalized economy. Gone are the years of off-shore operations that companies established only as cost-saving support hubs. Companies now rely on GCCs as strategic innovation centers driving operational efficiency, digital transformation, and R&D for multinational corporations (MNCs). With operations spread across regions as large as entire countries or even continents, choosing the right location for a GCC is a critical decision, shaped by factors like access to talent, infrastructure for GCCs, government policies, and cost-effectiveness of GCCs. More than a simple logistical choice, choosing the right city to establish a GCC is a strategic move that can determine the effectiveness of an organization’s global operations.

This article delves into the top GCC locations in India, highlighting trends, opportunities, and challenges shaping this dynamic sector. We discuss everything from India’s dominance as its cities become emerging GCC hubs, to the factors influencing the choice of location ranging from talent availability and cost-effectiveness to infrastructure and government support for GCCs. 

The Undisputed Leader in GCC Setup

India has cemented its position as the leader in the GCC landscape, hosting more than half of all global GCCs. Its appeal lies in a combination of a skilled workforce, competitive operational costs, and policies designed to attract foreign investment. 

India produces over 1.5 million engineering graduates annually, on top of world-class talent in science, medical, pharmaceuticals, and business services, creating an unmatched talent pool for GCCs. The cost-effectiveness of GCCs in India remains unparalleled, with operational costs up to 70% lower than in Western markets. Additionally, government incentives like SEZs and tax breaks have streamlined GCC setups, while advanced technology parks in cities like Bengaluru and Hyderabad ensure seamless operations.

Among the top GCC locations in India, Bengaluru, Hyderabad, Delhi NCR, Mumbai, Pune, and Chennai stand out as preferred choices due to their unique ecosystems.

Top GCC Locations in India

1. Bengaluru

If you look for any GCC in India, there’s a good chance that you will find one operating in Bengaluru. In Bengaluru, GCCs are the crown jewel in the throng of multinational companies that have set up shop with the city being home to 34% of India’s GCC workforce. Renowned as the "Silicon Valley of India," Bengaluru boasts an unparalleled ecosystem for technology and innovation. Bengaluru accounted for about 26.4 million square feet of GCC office space between 2020 and 2023. From software development and artificial intelligence to data analytics, the city serves as a nucleus for companies seeking cutting-edge capabilities. The presence of a thriving startup ecosystem further enhances its appeal, fostering partnerships and innovation in GCCs at scale. While most of the Bengaluru GCCs are working in the tech and professional services domain, a growing number of GCCs focused on the manufacturing sector are starting to establish themselves in the city. 

2. Hyderabad

Hyderabad has emerged as a formidable counterpart to Bengaluru. Known for its focus on digital transformation, nearly 45% of Hyderabad GCC roles are engaged in high-tech domains. The city’s government, particularly the state of Telangana, has implemented forward-thinking policies that incentivize foreign investment and support sectors like fintech, life sciences, and automation. Together, Bengaluru GCC and Hyderabad GCC account for a significant portion of GCC growth trends in India, setting benchmarks for other cities. Hyderabad GCCs account for 18% of the total talent working in GCCs in India and 17.1 million square feet of GCC office space leasing from 2020 to 2023.

3. Delhi NCR

Delhi NCR GCC is a strategic hub, particularly for financial services and professional sectors. Its proximity to key political and economic institutions enhances its appeal, offering access to a diverse and well-educated talent pool for GCCs. Companies in banking, insurance, and consulting are drawn to Delhi NCR for its strong market connectivity and robust infrastructure for GCCs. The region also benefits from its position as a cultural and economic gateway, making it a versatile operational base which is why 14% of India’s GCC workforce is located in the capital region with the total GCC leasing activity from 2020 to 2023 coming to approximately 7.9 million square feet of office space.

4. Mumbai

As India’s financial capital, Mumbai GCC is a natural choice for industries specializing in banking, finance, and media. The city’s vibrant economy and established industry clusters provide a fertile ground for innovation centers and shared service centers. Mumbai’s global connectivity through its ports and airports ensures seamless integration with international markets. Despite its high cost of living, the city remains attractive due to its access to high-caliber professionals and its status as a global business hub. Around 11% of India’s GCC workforce is employed in the roughly 200-300 GCCs located within Mumbai, with most of the GCCs being focused on sectors like financial services, BFSI, and pharmaceuticals. Mumbai's GCC office space leasing stood at around 3.1 million square feet between 2020 and 2023. 

5. Pune

Pune is a rising star in India’s GCC growth trends, known for its focus on R&D-driven operations. Its proximity to Mumbai and a robust educational ecosystem, anchored by leading universities, ensure a steady stream of skilled workforce for GCCs. Pune’s emphasis on advanced manufacturing, IT, and product development makes it a cost-effective location, offering businesses high value at lower operational costs. Its growing reputation as an innovation center is further strengthened by its excellent work-life balance and low attrition rates. Pune’s urban area houses 9% of the total workforce employed by GCCs in India. Pune’s GCC leasing totaled about 6.5 million square feet of office space from 2020 to 2023.

6. Chennai

Chennai’s deep roots in manufacturing and IT positions it as a powerhouse for GCCs seeking expertise in automotive, electronics, and engineering. The city’s strong industrial base, coupled with its growing IT sector, makes it a preferred outsourcing destination for global firms. Chennai’s strategic port access and cost-effective infrastructure add to its appeal, allowing businesses to achieve operational efficiency while maintaining a focus on innovation. Chennai is home to just under 10% of India’s total GCC workforce with approximately 11 million square feet leased between 2020 and 2023.

What Are the Trends in GCCs for Bengaluru and Hyderabad?

In Bengaluru, GCCs are evolving into innovation hubs, with significant contributions to R&D, software development, and digital transformation. The city’s ecosystem fosters collaboration between startups and established firms, driving advances in AI, cloud computing, and data analytics. Hyderabad, meanwhile, is rapidly gaining recognition for its focus on niche technologies like automation, robotics, and blockchain. Both cities are investing heavily in infrastructure and policies to further boost the GCC growth trends, making them indispensable to India’s global presence.

The Rise of Tier-II Cities in India

While Bengaluru GCCs and Hyderabad GCCs dominate the GCC landscape among other Tier-I cities, Tier-II and Tier-III cities are rapidly gaining traction. The decentralization of India’s economic activity has led to cities like Ahmedabad, Coimbatore, Kochi, and Visakhapatnam emerging as viable alternatives. Ahmedabad, particularly with the establishment of GIFT City, is positioning itself as a hub for financial services, offering companies both cost savings and access to a growing talent pool even as it grows as a Tier-I city. Similarly, Kochi is leveraging its improving infrastructure and burgeoning IT sector to attract new GCC setups, while Coimbatore’s expertise in engineering and IT services has made it a rising star post-Chennai. Visakhapatnam, with its strategic location and enhanced connectivity, is also gaining interest from businesses exploring cost-effective and efficient GCC locations. 

Bhubaneswar has made a name for itself as a knowledge hub, thanks to institutions like IIT Bhubaneswar and NIT Rourkela nearby. The city is ideal for R&D-driven GCCs due to its cost-efficient operations and a high-quality talent pipeline. Nashik is steadily positioning itself as a tech-forward city with expanding industrial and IT sectors. Its low cost of living, coupled with its proximity to Mumbai and Pune, makes it an attractive option for GCCs focusing on manufacturing, IT services, and fintech. Known for its strong engineering and manufacturing base, Vadodara offers a skilled workforce at an affordable cost. It is particularly suitable for automotive, chemical, and IT-enabled GCCs.

What Is Driving GCC Growth In India

The growth of GCCs is driven by several factors that are working in concert. Access to a skilled workforce is a critical determinant, with India leading the pack by producing over 1.5 million engineering graduates annually. These graduates, increasingly skilled in digital tools and emerging technologies, form the backbone of the GCC workforce. Countries like Poland and Malaysia also offer a skilled workforce, though often at higher operational costs.

Cost-effectiveness remains another major factor. Indian cities provide operational costs that are up to 70% lower than Western countries, a significant advantage for companies aiming to balance quality with affordability. Tier-II cities in India offer an additional 25-30% cost reduction compared to Tier-I locations, making them increasingly attractive for businesses.

Infrastructure plays a pivotal role in the success of GCCs. India’s world-class IT parks in Bengaluru and Hyderabad, along with advanced commercial spaces in cities like Pune and Chennai, ensure that companies have access to facilities that support complex operations. Globally, countries like Malaysia and the UAE also boast advanced infrastructure, but their smaller talent pools and higher costs limit their scalability.

Government support has been instrumental in fostering GCC growth. In India, initiatives like Special Economic Zones (SEZs) and tax incentives have created a conducive environment for foreign investment. Similarly, Malaysia and Vietnam offer competitive incentives, but their regulatory frameworks often lack the depth and clarity of India’s ecosystem.

Trends Defining the Future of GCCs

The GCC landscape is undergoing a significant transformation, driven by trends that highlight the sector’s evolution. Industry diversification is one of the most notable shifts, with GCCs moving beyond traditional IT and finance roles to focus on sectors like life sciences, fintech, and healthcare. This diversification aligns with the broader demand for innovation and high-value services.

Digital transformation remains at the heart of GCC's evolution. Centers are integrating technologies like artificial intelligence, IoT, and automation into their operations. This shift reflects the increasing emphasis on GCCs as innovation hubs rather than cost-saving centers.

Geographic decentralization is another emerging trend. Companies are increasingly exploring cities to balance operational costs with access to untapped talent pools. This trend is particularly evident in India, as cities are rapidly expanding their capabilities.

In terms of industries, 2024 saw substantial activity in:

1. Technology and IT Services: GCCs in India supported global giants in AI, data analytics, and cloud computing, driving innovation across verticals.

2. Banking and Financial Services: BFSI remains a cornerstone, with operations focusing on risk management, compliance, and digital banking solutions.

3. Healthcare and Life Sciences: A growing focus on R&D and technology integration is driving healthcare GCC setups, particularly in Hyderabad and Bengaluru.

4. Manufacturing and Automotive: Advanced manufacturing, including electric vehicles and automation, saw an uptick in GCC interest, with Pune and Chennai leading the way.

5. Retail and E-Commerce: With the growth of digital commerce, GCCs are playing a vital role in supply chain optimization and customer analytics.

Looking ahead, India’s GCC landscape is expected to grow further as businesses increasingly recognize the value of leveraging India’s talent and cost advantages. Emerging trends include:

1. Increased Diversification: GCCs will expand beyond traditional IT and BFSI roles, with significant growth in the life sciences, renewable energy, and food manufacturing sectors. The trend towards establishing innovation centers within GCCs is expected to continue, with many organizations prioritizing advanced technologies such as AI and cloud computing to drive transformation. 

2. Decentralization: Tier-II cities like Ahmedabad, Coimbatore, and Visakhapatnam will continue to attract investment, offering cost savings and access to untapped talent pools. 

3. Policy Enhancements: Government initiatives focusing on infrastructure and ease of doing business will further enhance India’s appeal as a global GCC hub.

Challenges That Companies Face in Setting Up GCCs

Despite their advantages, establishing GCCs comes with hurdles. Talent gaps in specialized domains like AI, cloud computing, and cybersecurity require significant investments in training and retention. Achieving operational efficiency while expanding roles demands refined GCC operational models. At the same time, emerging GCC hubs must overcome infrastructure limitations to sustain growth. Additionally, fostering a culture of innovation that aligns with corporate goals is a critical but complex task as GCCs continue to evolve.

In India, the complexity of navigating regulatory environments can delay the setup process. High competition for talent acquisition in Tier-I cities often leads to increased operational costs and high attrition rates, while emerging markets face infrastructure gaps that limit scalability. 

Globally, countries like Vietnam and the Philippines deal with limited infrastructure for GCCs, whereas nations like Poland and Singapore struggle with higher operational costs. Aligning local operations with global strategies also remains a significant challenge. Even though Bengaluru GCCs or Hyderabad GCCs are some of the most popular locations for international companies, they come with their own set of challenges like local regulations and compliance along with talent acquisition. 

Conclusion 

As the global economy grows increasingly interconnected, Global Capability Centers (GCCs) have become indispensable for businesses aiming to achieve innovation, operational excellence, and sustainable growth. Heading into 2025, India solidifies its position as the epicenter of GCC development. Cities like Bengaluru GCC and Hyderabad GCC lead the charge, offering unmatched advantages in talent, cost-efficiency, and infrastructure, ensuring the nation remains a dominant player in shaping business trends in 2025.

While other top GCC locations in Southeast Asia, Eastern Europe, and Latin America are emerging as viable alternatives for specific industries, India’s unparalleled talent pool for GCCs, combined with its cost-effectiveness of GCCs and robust government support for GCCs, continues to set it apart. The country’s ability to foster innovation, supported by technology parks, industry clusters, and forward-thinking policies, ensures its position as the premier destination for businesses establishing global capability centers.

If you’re considering strategic locations like to set up your GCC, Altre Digital offers end-to-end expertise. From evaluating cost-effective locations and navigating regulatory landscapes to securing ideal office spaces, we specialize in building GCCs optimized for success. Let us help you harness the full potential of India’s thriving ecosystem and transform your global operations. Contact Altre Digital today to take the first step in creating a scalable and future-ready GCC.