In H1 2023’s update of the Zinnov-nasscom India GCC ecosystem report, we focused on the Automotive, and Aerospace & Defense verticals. In the past, Global Capability Centers (GCCs) primarily established their presence in India to manage legacy work or serve as support functions for global operations.
However, the landscape has evolved significantly in recent years. Today, many GCCs are shifting their focus towards end-to-end product ownership, taking on responsibilities right from the moment they set foot in the Indian market. Notably, 83% of the new GCCs established in India in H1CY2023 encompass all three functional areas – Engineering Research & Development (ER&D), Information Technology (IT), and Business Process Management (BPM).
India presents a unique opportunity for global companies, setting it apart from other offshore destinations. The rapid pace of digitalization has established India as a stronghold in the Semiconductor and Technology & Platform sectors, with major players like Qualcomm, Texas Instruments, Amazon Web Services, and CISCO having a significant presence.
This digital prowess has fueled the growth of India’s Engineering Research & Development (ER&D) sector, with Automotive as a prime example. Established OEMs such as Ford, Bosch, BMW, and Continental are harnessing India’s robust ecosystem. The entry of companies like Daimler Truck, Switch, and Fisker into India underscores the country’s appeal as a global expansion hub.
This shift towards multi-functional GCCs reflects the growing confidence in India’s capabilities and highlights the country’s transformation into a dynamic hub for diverse business functions. The trend also signifies that organizations are increasingly leveraging India not just for cost-effective operations but as strategic partner capable of delivering end-to-end solutions and driving innovation across multiple domains.
Mercedes-Benz, for instance, has taken complete ownership of ADAS products and platforms, including intelligent drive systems at Level 2 autonomy and park assist systems. Additionally, Volvo has established its largest R&D center outside Sweden in Bengaluru, focusing on enhancing trucks produced by Volvo, Renault, and MAC using the latest technologies. These developments underscore India’s pivotal role in fostering innovation and research, positioning it as a hub for pioneering advancements in various industries.
The success story of India’s Automotive sector serves as a blueprint for the Aerospace & Defense industry. The combination of a thriving ecosystem, a wealth of digital and R&D talent, and a comprehensive value chain makes India an exceptionally attractive destination for both the Automotive, and Aerospace & Defense sectors.
Notable players such as Collins Aerospace, Boeing, Airbus, and Emirates are capitalizing on India’s ecosystem. The Indian government’s substantial investments in the Aerospace & Defense sector further fuels the industry’s growth. The combination of a thriving ecosystem, a wealth of digital and R&D talent, and a comprehensive value chain makes India an exceptionally attractive destination for both the Automotive, and Aerospace & Defense sectors.
A total of 18 new GCCs were established in India during the first half of the year 2023, with 9 being set up in Q1 and the remaining 9 in Q2. During the same period in 2022, this number was 36. Although, at face value, it appears that the decline in the establishment of net-new centers in India during the first half of 2023 might reflect a market slowdown, it’s essential to view this trend within a broader context.
Owing to regulatory and compliance backlogs caused by the COVID-19 pandemic, 2022 saw an unpredictable surge in the number of new GCCs setup in India. Discounting the likely carryforward from 2020 and 2021, the number of new centers in H1 2023 reflects a stable trajectory for the ecosystem. Furthermore, in FY2021, there were over 1.38 Mn installed GCC talent in India centers. This figure crossed 1.66 Mn in FY2023 and is expected to double by the end of 2026.
These indicators reaffirm India’s position as the preferred destination for organizations seeking not just capacity, but more importantly, exceptional skills and expertise to drive innovation and growth. This is reflected in a surge in new IPs created from India centers, more India site heads now occupying global roles, and value and capability arbitrage being driven out of Indian GCCs.
This joint nasscom-Zinnov report titled “India GCC Trends: Half-yearly Analysis H1CY2023” provides valuable insights on the state of India’s mature GCC landscape in the first half of 2023. It offers an overview of industry verticals, supported by best-in-class case studies with a specific sectoral lens on the Aerospace & Defense, and Automotive industries.