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The Collection Wed, 01 Oct 25 |
Multiple stories, multiple perspectives, one theme worth your time—every week. |
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Last week, Business Standard reported an interesting development.
According to the Reserve Bank of India, India’s software exports rose 12.7 per cent year on year to $180.6 billion in FY25. By contrast, the combined forex revenues of 64 listed IT services groups—spanning the BSE500, BSE Midcap, and BSE Small Cap indices—grew by only 3.8 per cent to $69.6 billion.
[…]
Analysts attribute the recent divergence to faster growth among unlisted IT firms and global capability centres (GCCs) set up by multinationals, alongside differences in how balance of payments (BoP) and company revenues are measured.
So, India’s software exports are growing in double-digits. But listed IT services firms, the traditional heavyweights in India’s services export sector, are lagging behind.
And at least part of the reason is the rise of global capability centres (GCCs)—units of global multinational companies operating in low-cost locations, doing essentially the same kind of work that companies used to outsource to IT services firms. India now has around 1,700 such centres—half the world’s share—most of which operate as “cost centres”, i.e., they are not expected to generate revenue or profits of their own.
India is becoming a primary hub for GCCs thanks to the same reason it became a hub for IT services—cheap, numerous talent.
But as GCCs grow, they are eating into the pie of IT services majors, both in terms of business and skilled talent.
Out of the 200,000 tech roles in India in FY25, approximately 120,000 were in GCCs, with a 10–15% year-on-year growth, said Vikram Ahuja, co-founder of ANSR, a GCC solutions platform.
This is in no small measure due to the stagnant salaries paid by Indian IT services companies, even as the skill sets they demand from employees become increasingly broader and more specialised.
In May 2025, my colleague Debanjali Biswas dove into the reasons behind this shift in expectations.
Infosys: the job that millions of India’s engineering grads took for granted is now a tough sell
More skills, same pay, and barely any job guarantee—the IT services giant is raising the bar for freshers
Earlier this month, another colleague of mine, Rahel Philipose, explored the threats that confront Indian IT services companies in her podcast 90,000 Hours, and how this isn’t the first time the sector has been forced to recalibrate.
Indian IT faces its ultimate reckoning. Here’s how founders and veterans are rethinking the playbook
But GCCs are a particularly thorny problem.
If you believe ICICI Securities’ September update, GCCs chipping away at their market share is one of the key challenges to IT services majors. But is this just a zero-sum game between the two? If one goes up, does the other have no choice but to come down?
We explored this question, and much more, in a Two by Two episode from July.
Two By Two • 49 |
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While GCCs were initially set up in India to serve technology companies, they have since expanded beyond this sector. Ask the father-son duo behind market leader ANSR, which provides GCC-as-a-service.
“The real evolution started with traditional companies coming in to set up true capability centres, like [department-store chain] JCPenney, [luxury-superstore chain] Saks Fifth Avenue, [lingerie retailer] Victoria’s Secret…They have no business to be experimenting with this concept.
All airlines, hotel chains, car-rental companies are coming. So, it’s become industry agnostic. On the contrary, the more low-tech and the more traditional you are, the more the need [for a GCC].”
And these GCCs aren’t just “outposts” anymore, they’re starting to play an integral role in innovation and business.
ANSR’s Ahuja duo on why “everybody, from Victoria’s Secret to Google, will do pretty much the same thing in India”
As technology upends every business, the idea of a ‘second headquarters’ is gaining steam. The more traditional the business, the more the need to set up capability centres in India
GCCs have also seeded a shift in job preferences for India’s teeming engineering graduates, who are now eyeing the banking and finance sector with far more favour.
Lloyds has hired over 2,500 engineers in Hyderabad within 14 months, with 95% focused on tech. At Barclays’ India operations, two–thirds of its tech workforce is now in-house—a stark jump from just about 33% a decade ago.
Even Indian lenders are following suit. Just six months ago, RBL Bank achieved a 60:40 split between in-house and outsourced tech talent—a significant leap from the 35:65 ratio of a few years ago.
Banks in India were never engineers’ dream jobs. Then GCCs happened
Global banks are reclaiming tech in India via global capability centres, and Indian banks are catching up—turning once-peripheral functions into prime fields for engineering talent
And it isn’t just engineers who are competing for GCCs favour; Indian cities are too.
Chennai makes a pitch to bring back multinationals’ offshore centres. If only it had the talent
Tamil Nadu made early moves to lure large companies into setting up their global capability centres in its capital city, but has lost ground to nearby tech hubs
I hope you enjoy our stories and podcasts on what is clearly a powerhouse sector in the making for India, and do stay tuned for more in the coming days.
Do write to [email protected] if you have any thoughts or feedback, or leave a comment on our website or app. You can browse this week’s entire collection below.
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Rahul leads the promotion and distribution efforts for the journalism produced by The Ken. He works at the intersection of the publication's editorial and business operations.
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