Beyond outsourcing: how ‘GCCs’ are reshaping India's growth story

Please find below our latest thoughts on India:

• Many global investors reduced their exposure to India in recent years. While foreign flows have begun to recover during the second half of 2026, they remain well below levels seen during previous bull market periods.¹
• Part of this caution may reflect prevailing market narratives. Recent headlines have focused on concerns such as elevated energy prices, high tariffs, and the potential disruption from artificial intelligence (AI).
• However, the picture at the corporate level appears considerably more encouraging. Indian companies have generally demonstrated resilience, and earnings growth remains healthy across many sectors.
• High-frequency indicators also point to improving momentum, with consumer spending, credit growth, and export data all exceeding expectations.

• Despite these positive developments, the improvement is not yet reflected in share prices. After two years of relatively flat market performance, valuations have become more reasonable for what has historically been viewed as an expensive market, creating a broad set of opportunities, in our view.
• Looking beyond equity market flows and valuations, another important trend is unfolding. Gross FDI (foreign direct investment) remains robust. Multinational companies are increasingly choosing India as a strategic base for building global operations.
• India is already the world's largest hub for Global Capability Centres (GCCs), employing more than 2.36 million professionals across over 2,100 centres and generating close to USD 100 billion in annual revenues.²
• What is particularly noteworthy is the changing profile of new entrants. Earlier generations of GCCs were predominantly established by large financial institutions seeking to outsource back-office support.
• Today’s expansion is being driven by a far broader range of industries including consumer brands, retailers, technology/AI firms, and healthcare companies. Recent announcements from Starbucks and Walgreens illustrate this trend.
• This development is significant. GCC investment represents one of the highest-quality forms of foreign direct investment, as it is typically long-term, talent-intensive, and difficult to relocate.
• GCCs also generate wider economic benefits through higher-skilled employment, including rising urban incomes, increased consumption, and stronger demand for real estate.
• The attraction is clear. India offers one of the world's deepest pools of STEM talent (science, technology, engineering, and mathematics), enabling companies to recruit engineers, software developers, data scientists, and finance professionals at scale.
• While labour costs have risen over time, India's talent availability and cost competitiveness remain compelling relative to many other markets.
• GCCs are also moving up the value chain, with many new centres established with responsibility for product ownership, platform development, engineering, and innovation work rather than outsourced support functions.
• For example, roughly 20% of the world's semiconductor designers are based in India, with firms such as Intel, Nvidia, and Qualcomm employing thousands of professionals across Bengaluru, Hyderabad, Pune, and Noida.³

• Corporate decisions to establish technology centres, engineering hubs, and research facilities reflect strategic commitments that are measured in decades rather than quarters.
• While equity flows and market sentiment can be volatile, the direction of foreign direct investment provides a powerful signal of long-term confidence in India's economic prospects.

¹ JP Morgan, EM Money Trail, as of 25 September 2026.
² Zinnov-Nasscom GCC Landscape in India 2026, data as of FY 2026.
³ HSBC, India Semiconductors: A deep dive into India’s value chain, as of July 2026.

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