GCCs Set Up 15 Incubators, 40 Accelerators: Economic Survey

SUMMARY

Citing a NASSCOM report, the survey said that GCCs have established more than 15 incubators, over 40 accelerators, and multiple partner programmes to drive collaboration with Indian startups

Not to mention, these GCCs have explored various forms of collaboration, such as innovation labs, hackathons and startup incubators

GCCs are established by organizations worldwide to make use of global talent, resources, and expertise.

In a highly competitive global environment due to its ample talent endowment and cost advantage, India remains a Global Capability Centres (GCC) favourite, the Economic Survey 2023-24 said.

Citing a NASSCOM report, the survey said that GCCs have established more than 15 incubators, over 40 accelerators, and multiple partner programmes to drive collaboration with Indian startups.

GCCs are established by organizations worldwide to make use of global talent, resources, and expertise.

Not to mention, these GCCs have explored various forms of collaboration, such as innovation labs, hackathons and startup incubators.

In sectors like healthcare and pharmaceuticals, GCCs are increasingly partnering with startups and universities to access new technologies, the report said.

Notably, engineering, research and development Global Capability Centres have grown by over 30% to about $25 Bn in financial year 2022-23.

Additionally, the information technology and business process management sectors grew faster in percentage terms but on a smaller basis. GCCs within the IT segment grew by 30% Bn, while the BPM segment grew about 27% to $10.7 Bn in FY23.

The report further underlined that GCCs in India have grown significantly, from over 1,000 centres in FY15 to more than 1,580 centres, with over 2,740 units by FY23. These centres contribute to economic growth by providing high-quality employment.

In FY23, more than 16.6 Lakh people were employed in Indian GCCs. Out of these, over 42% worked in engineering, research and development, 34.5% in business process management (BPM), and 23.4% in IT services. The software, internet, banking, financial services, and insurance (BFSI) sectors together make up about 58% of India’s IT GCC workforce.

The revenue from India’s GCCs has grown from $19.4 Bn in FY15 to $46 Bn in FY23, with an annual growth rate of 11.4%, the report noted.

In terms of numbers, there were about 760 GCCs in India in 2012. By 2016, this number increased to over 1,000 and as of March 2023, India has more than 1,600 GCCs.

The survey attributed this growth to the government’s strategic interventions under initiatives like ‘Digital India’ as well as policies towards easing doing business that streamlined online approvals and licensing processes for GCCs.

Additionally, streamlined tax regulations and compliance procedures for foreign companies to set up GCCs, flexible labour laws, and single-window clearance systems for faster approvals have also contributed to this surge in GCC.

In terms of the state’s approach toward the GCC ecosystem, the survey outlined that states undertook a multi-pronged approach by identifying high-potential industries.

For instance, Karnataka, Telangana and Tamil Nadu governments’ R&D policies to expand the GCC landscape in sectors such as auto and electric vehicles, electronics, pharma and life sciences.

While Telangana contributes to over 30 per cent of India’s pharma production, the Karnataka Digital Economy Mission (KDEM) aims to increase the state’s contribution to India’s digital economy to $300 Bn by 2026.