Why is Hyderabad a Top Choice for Global Capability Centres?

Technology is upending the relationship between people, processes, & value. The Global Capability Centre (GCC), which once operated as a back-end support, is now a strategic tool for most companies. They help businesses drive product innovation, workforce development, talent building & financial decision-making. Research by NASSCOM shows that over 1.9 M people are employed in GCCs across India.

From a mere technology centre, the Hyderabad GCC hub owns product innovation, talent sourcing, financial decision-making, analytics, & research & development. According to recent statistics, there are about 400+ GCCs in Hyderabad with a workforce of 3 million.

Many companies, both within & outside India, look towards Hyderabad to set up their GCCs to drive business outcomes & operational success.

What are Global Capability Centres (GCCs)?

A global capability centre (GCC) is a captive centre set up by companies offshore to fuel organisation-wide digital transformation & provide specialised talent expertise to drive performance & innovation. Though GCCs operated as back-end processes, they have become a strategic asset for most companies in building a talented workforce, financial stability, managing cyber risks, & driving business success. According to NASSCOM, GCCs will enter Tier 2 & Tier3 cities and will grow 8% by 2030.

What makes Hyderabad GCC Hub valuable for Global Companies?

India is home to over 50% of the world’s GCCs. Here are the top 4 reasons why global companies are competing to establish global capability centres in Hyderabad.

1. Skilled Workforce

Hyderabad has experienced aggressive growth over the last decade. From an IT talent hub, the multi-layer talent ecosystem has made the city an attractive location for global companies to set up GCCs. Moreover, the emerging skilled workforce in Hyderabad, specialised in AI, ML, Cloud, IoT, cybersecurity & data analysis, makes the city an ideal option for companies to build global capabilities and support product innovation.

2. Cost & Infrastructure

The deep technological penetration across regions makes Hyderabad a unique location for global companies. The well-connected infrastructure, innovation tech parks, & ambience have attracted companies not only to set up GCCs in urban zones, but also in remote areas. Moreover, the accessibility of vendor markets specialised in cloud, cybersecurity, ERP, AI, legal, HR & real estate services is driving operational efficiencies, cost arbitrage, & expansion in Hyderabad.

3. Government Support

Telangana’s pro-innovation approach & incentive support, like business-friendly regulations, tax exemptions, and SEZ benefits, have helped the Hyderabad GCC ecosystem to expand exponentially. Moreover, the political maturity & economic climate enable the GCCs to make long-term investments.

4. Sectoral Diversity

Hyderabad is known for its industrial diversity. The multi-sectoral operational models & layered business needs captivate global companies to invest in the region. Moreover, this varied ecosystem has reduced execution & operational risks, enabling new GCC entrants to operate and expand in future.

What are the key Industries driving GCC Growth in Bangalore?

GCCs are flocking to Hyderabad for its technology, strategy and operational capabilities across many industries. Among the many, here are 4 key sectors that are helping GCCs make a significant impact.

1. IT & ITES industry

A prime reason why global companies are establishing GCCs in Hyderabad is to gain quick access to engineering, sales, AI, & other niche talent. They include software engineers, IoT Architects, Blockchain engineers, DevOps engineers, data analysts, & others.

2. BFSI Industry

To drive next-gen banking and financial services in GCCs, Hyderabad is a hub for niche BFSI talent. As the city is known for top B-Schools, it has a reservoir of business analysts, tax specialists, sales professionals, audit managers, & risk managers to handle critical functions such as global cash flows, financial analysis, compliance & risk.

3. Manufacturing Industry

As GCCs handle manufacturing automation, analytics & digital engineering, product engineering & design, Hyderabad has a strong engineering talent ecosystem & manufacturing hubs to support large-scale production, product innovation, & quality services.

4. Healthcare & Pharma

Hyderabad has become a life sciences hub as GCCs focus on innovative clinical trials, research practices, & regulatory compliance. GCCs partner with top R&D centres and healthcare institutes in Hyderabad to optimise new drug discovery, global health practices, reduce clinical costs, & improve TAT in patient care.

How Does Hyderabad Compare with Other GCC Cities in India?

Hyderabad, from other metro cities, has a vibrant and strong ecosystem that enables the establishment of GCCs. Here are the key factors that make Bangalore an attractive option for global companies to set up GCCs.

What are the key challenges companies face while setting up GCCs in Hyderabad?

While Hyderabad offers several benefits, it also presents critical challenges for global companies that plan to set up GCCs in the city.

1. High Real Estate Costs

Setting up exotic GCC centres in prime locations can be expensive due to high commercial rentals. This can affect the cost arbitrage benefits.

2. Infrastructure Stress

Intense traffic congestion, inadequate commuting facilities, & poor ambience may affect the quality of life in most urban centres. In such cases, GCC employees may face increasing workforce challenges & a life-work imbalance.

3. Competition for High-end Talent

Leading firms and startups compete fiercely for specialised talent. This can be challenging for GCCs as they must constantly track market benchmarks to avoid retention risks & wage costs.

4. Complex Regulation Standards

As GCCs enter the region, despite government incentives & tax exemptions, they can be agnostic about the new labour law updates, regulation standards, & approval agencies.

5. Cultural & Operational Alignment

Ensuring operational & cultural alignment of a GCC with the parent company is an extremely daunting task. Also, managing local labour laws, leadership, & change management in the GCC is critical as it can distort operational and strategic direction.

What are the Future Trends for GCCs’ growth in Hyderabad?

The Hyderabad business ecosystem, alongside the establishment of GCCs, will be shaped by 4 key trends.

1. Cost Centres to Innovation Hubs

Hyderabad will focus more on value creation and cost optimisation as global companies will set up GCCs, which will focus on advanced functions such as AI, automation, ML, & big data analytics.

2. Hybrid/Remote Workforce Models

Remote and hybrid work models are changing the workforce dynamics in the GCCs in Hyderabad. Placing efficiency and adaptability at the core, GCCs in Hyderabad are opting for managed workspaces to accommodate & control remote teams & save rentals.

3. Sustainability

ESG has become integral to GCCs in Hyderabad. They use green building certifications along with IoT, AI, & analytics to track energy consumption & design energy-efficient infrastructure.

4. Collaborative Intelligence

By engineering partnerships with top R&D centres, Universities, Think Tanks, GCCs in Hyderabad, can drive breakthroughs in AI, automation, sales, design technologies, security, risk management, & sustainable solutions.

5. Upskilling

People form the core of business transformation. As tech talent remains a key driver for GCC’s operations & scaling in Hyderabad, industries must invest in reskilling & upskilling programs to enable workforce development and build a futuristic workforce.

Key Takeaways

Hyderabad has become an unavoidable option for GCCs for its diverse mix of niche talent, innovative digital infrastructure, research & innovation, & pro-governmental support. As GCCs continue to invest in establishing their centres, Hyderabad will be a powerful engine to drive their global operations, innovation, & business outcomes.

1. Access to a skilled workforce in Hyderabad, as the city ranks 3rd in India for AI talent.
2. Quick access to vendor market in AI, design, sales, legal & ERP.
3. High reduction in operational, system maintenance, & talent acquisition costs.
4. Sign prospective partnerships with think tanks, research institutes, & start-ups to boost product/service innovation.
5. Avail pro-industry government support & statutory benefits to run GCCs.

Frequently Asked Questions

1. Why is Hyderabad attractive for global companies?

Hyderabad has become an attractive destination for GCCs for its tech talent base, digital infrastructure, quick access to vendor services, research & development activities, startup ecosystem, & favourable government policies.

2. What are Global Capability Centres in India?

Global Capability Centres in India are captive centres set up by global companies offshore to fuel organisation-wide digital transformation & provide specialised talent expertise to drive performance & innovation.

3. Which city is best for GCC in India?

Hyderabad, known for its stable political maturity, talented workforce, low-cost real estate, connectivity, vibrant industry & startup ecosystem, make it unique for global companies to set up GCCs from other metro cities like Bangalore, Chennai, or Mumbai.

4. Why are companies expanding in Hyderabad?

Companies in Hyderabad expand for skilled talent, vibrant industry & startup ecosystem, high-quality research & development, & pro-industry government support.

5. What industries are growing in Hyderabad?

IT/ITES, manufacturing, BFSI, healthcare, retail, & pharma industries are growing in Hyderabad.

6. Why is Hyderabad considered a technology hub?

Hyderabad is a leading technology hub in India. This is due to the talent diversity and competitive industry landscape, a vibrant startup ecosystem & proactive government support. 

Contact Us For Business Enquiry

Kishore V N

Managing Director

Kishore V N is the Managing Director at ALP Consulting, bringing over 29 years of extensive experience in global recruitment, talent strategy, and workforce solutions. He has been instrumental in building scalable RPO, MSP, and modular talent sourcing models that empower organizations with a competitive edge in talent acquisition. Kishore’s leadership focuses on expanding ALP’s global presence, driving innovation in recruitment technology, and enhancing operational excellence. He also serves as Director at Datacore Technologies, steering digital HR transformation through advanced HRMS and virtual staffing solutions.