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Global Capability Centers (GCCs) are a strategic investment for multinational companies, leveraging India’s skilled workforce and cost advantages. With over 1,580 GCCs contributing nearly 1% to India’s GDP, the sector is projected to reach $110 billion by 2030.
Setting up a GCC involves key cost components like real estate, talent, technology, and compliance, with India offering 30-40% lower operational costs than Eastern Europe and Latin America. Government incentives, including tax breaks and rental subsidies, further enhance cost efficiency.
The data presented aligns with industry standards and provides a realistic overview of the costs associated with setting up a GCC in India. However, actual expenses can vary based on specific circumstances, and it’s advisable to conduct a detailed, customized analysis when planning such an investment.
5 Key Factors That Influence The Cost of Setting Up a GCC
Infrastructure and Real Estate Costs
The choice of city significantly impacts real estate expenses for GCCs. Major IT hubs like Bengaluru, Hyderabad, and Pune offer excellent infrastructure but have higher rental costs, whereas emerging cities provide cost-effective alternatives.
Estimated Real Estate Costs (Annual Rent per sq. ft.)
- Bengaluru (Outer Ring Road, Whitefield) – ₹80-150
- Hyderabad (HITEC City, Gachibowli) – ₹60-120
- Pune (Hinjewadi, Baner) – ₹50-100
- Chennai (OMR, Guindy) – ₹60-110
- GIFT City (Ahmedabad) – ₹40-80 (Emerging hub with tax benefits)
Talent Acquisition and Employee Compensation
India’s strong talent pool is a significant reason companies establish GCCs here. The average cost per employee includes salary, benefits, and training programs.
Average Annual Salary by Job Role
- Software Engineer – ₹10-20 lakh
- Data Scientist – ₹15-25 lakh
- Project Manager – ₹20-35 lakh
- Cybersecurity Specialist – ₹18-30 lakh
- HR & Administration – ₹8-15 lakh
The total operational cost per employee in an Indian GCC is approximately $25,000 annually, 30-40% lower than in Eastern Europe and Latin America. Global recruitment agencies like Supersourcing help businesses with pre-vetted tech talent for their engineering needs in up to 90% less time.
Technology and Infrastructure Setup
Establishing a GCC requires a robust IT infrastructure, including hardware, software, cloud services, and cybersecurity.
Estimated IT Setup Costs
- Workstations & Laptops – ₹50,000-1,20,000 per unit
- Networking & Servers – ₹5-15 lakh
- Cloud Services (AWS, Azure, GCP) – ₹5-20 lakh annually
- Cybersecurity & Compliance – ₹10-25 lakh annually
- Enterprise Software (SAP, CRM, HRMS, etc.) – ₹15-50 lakh annually
Total IT infrastructure costs range from ₹50 lakh to ₹2o crore, depending on scale.
Regulatory Compliance and Legal Expenses
A GCC must comply with Indian corporate laws, tax regulations, and labor laws. Engaging legal and consultancy services is necessary for smooth operations.
Key Regulatory Costs
- Company Registration (MCA Fees) – ₹15,000-50,000
- GST & Tax Compliance – ₹1-5 lakh annually
- Employment & Labor Law Compliance – ₹2-10 lakh annually
- Data Protection & IT Laws (DPDP, GDPR Compliance) – ₹5-15 lakh annually
Total regulatory costs can range from ₹10 lakh to ₹50 lakh annually.
Government Incentives and Subsidies
India offers various incentives to attract GCCs, which can significantly reduce setup costs. Several state governments provide tax benefits, capital subsidies, and rental reimbursements.
Major Government Incentives for GCCs
Uttar Pradesh GCC Policy 2024
- 50% reimbursement on costs incurred for proofs-of-concept with startups (up to ₹ two crore annually for 5 years).
- Employment-linked incentives for hiring local talent.
Karnataka GCC Policy 2024-2029
- It aims to double the number of GCCs to 1,000 by 2029.
- Support for skill development and hiring.
Gujarat GCC Policy 2025-30
- Incentives for setting up in GIFT City.
- Tax exemptions and single-window clearance.
Learn more: 7 Best Emerging Tier-2 Cities for GCC Setup
Total Estimated Cost of Setting Up a GCC in India
Conclusion:
Setting up a GCC in India offers significant cost advantages compared to other global locations. While initial setup costs range between ₹ five crore to ₹100 crore+, the availability of government incentives, lower operational costs, and access to a large talent pool make it an attractive destination.
Key Takeaways
✔ India offers 30-40% lower operational costs than Eastern Europe & Latin America.
✔ Major IT hubs like Bengaluru & Hyderabad are high-cost but talent-rich.
✔ GIFT City, Gujarat, & Uttar Pradesh provide lucrative incentives.
✔ Government policies aim to support and expand GCC operations.
Companies looking to establish or expand a GCC must conduct a thorough cost-benefit analysis and leverage government incentives to maximize ROI.
FAQs: Cost of Setting Up a GCC in India
1. Which city in India is the cheapest to set up a GCC?
GIFT City (Gujarat), Indore, and Coimbatore offer lower real estate costs and government incentives.
2. How much does it cost to hire a skilled employee in an Indian GCC?
The average salary for tech employees is between ₹10 and 25 lakh per annum, depending on experience and role.
3. Are there any tax benefits for GCCs in India?
States like Gujarat and Uttar Pradesh offer tax benefits, rental reimbursements, and employment-linked incentives.
4. What is the most significant cost in setting up a GCC?
The most significant cost components are real estate, employee salaries, and technology infrastructure.
