Mid-sized and smaller companies in the US are also trooping to India to set up Global Capability Centres as they struggle with high inflation and talent shortages. This has prompted property consultant Cushman & Wakefield to set up a GCC advisory practice to help them establish their centres here.
The services and solutions being offered range from executive compensation, hiring, taxation, legal, banking and IT solutions and will not be restricted to the real estate space. While large tech companies such as Amazon and Google have the wherewithal to navigate the rules and regulations, smaller companies entering India for the first time would need assistance.
“There is an unprecedented explosion of demand from US companies over the last two years,” said Matthew Buow, Chief Executive, APAC, and hit by high inflation and lack of adequate talent, they are looking for cost-effective solutions, and India was an obvious choice for them to set up innovation centres.
C&W will work with partners who will provide necessary assistance in their respective areas of expertise.
According to data by the consultancy, about 40 per cent of GCCs set up in India in the last two years are global research and development and innovation centres. Around 55 per cent of the GCCs set up in India over the last three years are firms with less than $10 billion revenue, and many of them would be entering the country for the first time.
The data showed that two-thirds of the GCCs set up in India over the last two years are small first-time entrants to India. While earlier, the growth in GCCs was driven by US companies, over the last 2-3 years, there has been an increase in companies from Europe and Japan.
India has become the global epicentre for GCCs and is poised to capture a share of 60-75 per cent by 2030, with 2400 GCCs up from 1600 now.
It is not merely cost arbitrage but the availability of high-tech talent, innovation capabilities, lower real estate costs and policy support that is driving the demand.