GCCs Not Packing Bags Just Yet for Small-Town India

Patchy infra and thin talent pool stall plans to shift beyond metros

- AVIK DAS & AASHISH ARYAN

The Indian government wants global capability centres (GCCs) to look beyond Bengaluru, Hyderabad, and Chennai, and expand into Tier-II and Tier-III cities. But that shift won't happen anytime soon, say industry executives, citing weak infrastructure, inadequate talent availability, and an ecosystem that's still developing.

That ecosystem will only solidify once service companies build a critical mass in cities like Ahmedabad, Indore, Mysuru, Coimbatore, Mohali, or Bhubaneswar, followed by an influx of startups. While firms such as Tata Consultancy Services, Infosys, Cognizant, and Wipro have set up delivery centres in these cities over the years, the startup landscape remains early-stage.

As announced in the Union Budget, the government is likely to soon roll out a framework to guide states in establishing GCCs, especially in smaller cities. The guidelines will include suggestions for improving talent availability, infrastructure, by-law reforms, and industry collaboration mechanisms. Tamil Nadu and Karnataka already have policies and processes that can help firms set up technology (tech) centres in different parts of the state.

"GCCs exist not in silos but in an ecosystem," said Sangeeta Gupta, senior vice-president and chief strategy officer at Nasscom. "You need to get service companies in, you need to energise the startup ecosystem, and only then do GCCs make sense. They can't exist in isolation."

That holds for engineering talent considering a return to their hometowns in smaller cities. Without a strong company presence, switching jobs for better opportunities may still require moving back to the metros.