India’s rise as GCC hub shows way forward

SWAMINOMICS

- SWAMINATHAN S ANKLESARIA AIYAR

De-globalisation has become a common theme after global value chains were severely disrupted by Covid and geopolitical events such as US sanctions on China and western sanctions on Russia.

What some call hyper-globalisation of the early 21st century may well have ended, and some once-outsourced industries and services are being onshored. But globalisation is still alive and kicking.

One form of globalisation is progressing rapidly without much recognition. This is the rise of Global Capability Centres (GCCs). Nasscom (National Association of Software and Service Companies) estimates that by 2021 more than 1,400 MNCs (multinational corporations) set up GCCs in India, employing 1.3 million highly skilled people with a revenue of $36 billion. Nasscom projects that by 2025 India could have 2,000 GCCs employing 2 million people and generating $60 billion of revenue.

Many Indian start-ups have been created by former employees of the GCCs. Thus, skills nurtured by GCCs spill over into other sectors. This helped India create 100 unicorns (unlisted start-ups with an estimated market value of over one billion dollars).