Karnataka is set to strengthen its position in the global outsourcing landscape by aiming to double its Global Capability Centers (GCC) to 1,000 and generate 350,000 new jobs by 2029. This goal was outlined in a draft policy presented on Friday.
The draft policy outlines a series of incentives designed to attract foreign companies, including reimbursement of rental costs, assistance with patent fees and electricity tax exemptions linked to the number of employees in a GCC. Furthermore, the Karnataka government aims to achieve an economic output of $50 billion through these new offices by 2029.
In a post on X (formerly Twitter), Deputy Chief Minister DK Shivakumar said: “Our vision through this policy is to be home to more than 15 per cent (330) of Forbes 2000 companies by 2030, creating more than one million jobs across all sectors. This will further strengthen Karnataka’s position as a global technology hub.”
Beginning as low-cost outsourcing centers, CCGs have evolved into multifaceted centers that support various functions of their parent organizations, including daily operations, finance, and research and development. Currently, over 1,700 CCGs operate across India and employ over 1.9 million people.
According to a recent report by IT industry body Nasscom and consultancy Zinnov, this figure could rise to between 2,100 and 2,200 GCCs by 2030, employing approximately 2.5 million to 2.8 million people.
The Karnataka government has stated that the new incentives are aimed at not only enhancing the state’s footprint in the GCC in Bengaluru but also encouraging companies to set up operations in emerging cities like Mangaluru, Mysuru and Tumakuru. To support this initiative, the government plans to establish three new technology parks, fund training courses and provide grants for research projects, particularly those focused on artificial intelligence. The draft policy will remain open for public comment until November 11.
Bengaluru: A GCC hub
Bengaluru currently stands as India’s leading hub for GCCs, accounting for 36 per cent of the GCC workforce in the first two quarters of FY25, according to a recent report by TeamLease Digital. This dominance is largely due to the city’s thriving high-tech sector, which makes up 37 per cent of the GCC’s total workforce. Professional services, including banking, financial services, insurance (BFSI) and consulting, account for another 21 percent, while the manufacturing sector (mainly automotive and electronics) contributes 10 percent, highlighting the growing importance of Bengaluru in the global technology and manufacturing landscape.
In recent years, GCCs have become key drivers of innovation and job creation in various industries. As they continue to evolve, partnerships with these centers are expanding to address the growing demand for specific skills and the co-creation of new job roles.
Additionally, significant growth has been seen in sectors such as healthcare, BFSI and retail, which have recorded compound annual growth rates (CAGR) of over 30 per cent between 2021 and 2023. Despite a slowdown in the sector overall over the same period, the GCC’s software and internet sector has prospered, with a projected CAGR of 6.2 percent by 2027. The retail and e-commerce sectors are expected to The GCC was expected to experience even stronger growth, with a CAGR of 8.4 percent, followed by healthcare at 7.5 percent.
First published: September 27, 2024 | 15:27 IS
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