Saturday, February 8, 2025

Government Plans Incentives for GCCs in Tier-2 and Tier-3 Towns

Indian government is working on a new policy to provide incentives for setting up Global Capability Centres (GCCs) in tier-2 and tier-3 towns and cities.

This initiative aims to decentralize the concentration of tech hubs and promote economic growth in smaller cities2.

Policy Details and Economic Impact

The policy, being prepared by the Ministry of Electronics and Information Technology (MeitY), is expected to offer incentives such as tax breaks and dedicated office zones.

These incentives will be in addition to those already provided by state governments.

The goal is to encourage both large and small GCCs to establish their units in these towns and cities.

Industry body Nasscom estimates that the GCC market in India is projected to reach $100 billion by 2030. This growth is expected to employ over 2.5 million people.

GCCs in India will generate $64.6 billion in revenue and employ nearly 2 million people in fiscal 2024.

The new policy will further boost this growth. It aims to attract more companies to set up their GCCs in tier-2 and tier-3 towns.

GCCs: Focus on Talent Development and Industry Trends

The policy will also focus on talent development in niche areas such as generative artificial intelligence (AI), healthcare, and financial intelligence.

This is in response to the growing demand for specialized skills in these sectors.

The government aims to create a robust ecosystem that supports the development of high-value capabilities.

For smaller towns and cities that may lack the land for large office zones, the IT ministry is considering incentives for setting up smaller GCCs.

These GCCs will be focusing on specific sectors like healthcare and finance.

This approach aims to ensure that even towns with limited resources can benefit from the growth of GCCs.

Between Q1 2023 and Q4 2024, 124 new companies transacted GCC deals and took up office space for greenfield capability or R&D centers.

Small and mid-sized companies accounted for a large share of these transactions. Of the new GCCs, 44% have annual revenues under $1 billion.

This trend indicates a shift towards high-value capabilities and the integration of advanced AI technologies.


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Sahiba Sharma
Sahiba Sharmahttps://sightsinplus.com/
Sahiba Sharma, Senior Editor - Content at SightsIn Plus