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As the year 2023 neared its end, India’s Global Capability Centers (GCCs) sector adeptly steered through a challenging economic environment. The sector faced a global backdrop shadowed by potential recessions, rising interest rates, and persistent inflation, which naturally tempered growth expectations. However, India’s GCCs displayed a formidable resilience amidst these trials. A standout moment came in the third quarter, with the launch of 19 new GCCs — a testament to the sector’s robustness. Although the fourth quarter saw a more conservative increase with 10 new centers, this period marked a deliberate pause—a strategic recalibration as global entities navigated through prevailing uncertainties and reassessed their operational strategies.
The GCC Intensity Index, holding at a ‘Medium’ level during this period, reflects a balanced dynamic of expansion within the established operational landscape and the emergence of new entrants. This equilibrium showcases India’s strategic deployment of Global Capability Centers (GCCs), balancing between Tier-I cities—such as Bengaluru, Hyderabad, Chennai, and Pune—with Tier-II cities also gaining traction.
The semiconductor industry stands out, with 30% of the new GCCs operating within this field. India’s semiconductor space is on an impressive trajectory, with Bengaluru and Hyderabad at the helm, hosting over two-thirds of the 55+ Semiconductor GCCs. A total of 95+ units and 50K+ specialized workforce underline India’s commitment to the semiconductor sector.
The Semiconductor GCCs in India are honing their focus on the complete chip development cycle, showcasing a shift from being mere service providers to transformation hubs. This is evidenced by the broad array of job roles in wafer design, fabrication, and system integration. Semiconductor chips from these centers are now crucial enablers across a multitude of sectors, from automotive to telecom, influencing vast product portfolios.
Showcasing their R&D capabilities, Semiconductor GCCs in India are securing an increasing number of patents, with over 33 patents granted in 2023 alone. This drive for innovation is carving out India’s niche in the semiconductor value chain, establishing the country as a significant player in the global semiconductor landscape.
India’s semiconductor industry is growing under strategic government initiatives, with significant investments and partnerships fostering growth. Key government-led initiatives throughout 2023, like the establishment of a Semiconductor Supply Chain partnership with the US and a collaboration with the European Union (EU), have heightened India’s status as a semiconductor powerhouse.
The policy environment has become increasingly conducive to growth, with states like Gujarat and Odisha implementing targeted policies, incentives, and industry-academia collaborations, designed to propel the semiconductor sector forward. The Gujarat Semiconductor Policy 2022-27 and the Odisha Semiconductor Manufacturing & Fabless Policy are prime examples, offering capital assistance and subsidies that herald a new era of tech-driven manufacturing in India. Tamil Nadu and Karnataka have also rolled out ambitious policies aiming to boost the sector’s growth.
On the partnership front, there has been a series of significant collaborations, such as Micron Technology’s investment in Gujarat and Intel’s outcome-based research with IIT Bombay, pushing the frontiers of innovation in the semiconductor space. These partnerships are not only enhancing India’s domestic capabilities but also integrating its ecosystem with global semiconductor networks, ensuring the nation’s pivotal role in the international semiconductor supply chain through the currently developing semiconductor GCC ecosystem.
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