According to a report by HSBC Global Research, the global capability centre (GCC) market is growing in India and overall share of GCCs in total information technology (IT) exports from India increased from 18 per cent in 2015 to 23 per cent in 2023.
The report noted that India has 1,500-1,600 global GCCs which are offshore units established by multinational companies (MNCs) to perform a range of strategic functions.
As per the report, the revenue of GCCs has been growing at a compounded annual growth rate (CAGR) of 11 per cent since 2015 compared to 8 per cent for top five Indian IT companies. The The report added that GCCs’ cost/head (including salary cost and overheads) is 30-40 per cent higher than that of internet service providers (ISPs) on average.
It further added that this is due to an inferior pyramid and higher like-for-like salaries at most levels. However, as ISPs have a significant offshore markup (pricing over costs), GCCs’ cost/head is 20-25 per cent cheaper than the billing rate of ISPs. Meanwhile, for mature GCCs in the banking space, nearly 30-40 per cent global technology and operations staff are in India now and is a stable state. Furthermore, it added that some migration may continue over the next 1-2 years, though beyond that as costs per head escalate and GCCs’ pyramid structure bloat.
