New Delhi, Feb. 5 -- For more than two decades, the India-US technology relationship followed a familiar script. US corporations outsourced work to India to reduce costs, while Indian IT firms built scale by supplying skilled talent across software development, maintenance and support. That model still exists-but it is no longer the centre of gravity. This year's tech engagement is being reshaped by large, long-term investment commitments, the growing strategic importance of Global Capability Centres (GCCs), and a clear shift towards building technology ownership and decision-making capability in India, rather than merely consuming services from it. That said, India is no longer just a delivery destination. It is increasingly emerging as a core innovation and execution hub within global enterprise technology strategies.
What has changed in the nature of US investments into India?
One of the clearest indicators of this shift is where US capital is being deployed. American technology firms are no longer investing in India primarily to chase local revenues or expand sales and support teams. Instead, capital is flowing into cloud infrastructure, AI platforms, data centres, cybersecurity capabilities, skilling programmes and advanced engineering capacity. These are long-gestation investments that assume India will remain central to global enterprise technology roadmaps for years. Unlike earlier investment waves-often linked to customer support or regional market expansion-today's capital flows align closely with core enterprise priorities such as artificial intelligence adoption, cloud modernisation, cyber resilience and data governance. As Microsoft chief executive Satya Nadella has said in public forums, India is increasingly a place "where global technology is built, not just deployed."
Why are GCCs central to this transformation?
At the heart of the new Indo-US tech equation is the evolution of Global Capability Centres. India already hosts the world's largest concentration of GCCs, but their mandate has changed sharply. Earlier, GCCs functioned largely as extensions of headquarters, handling application maintenance, IT support, finance operations and shared services. In 2026, a growing number of US-headquartered enterprises are assigning global responsibilities to India-based GCCs across AI engineering, product development, cloud operations, cybersecurity and advanced analytics. Many GCCs now build platforms used across global markets, rather than executing narrowly defined tasks. This includes developing AI models, running enterprise data platforms, managing cloud cost optimisation and influencing enterprise architecture decisions. An EY report on GCCs has noted that India-based centres are increasingly viewed as "innovation engines rather than execution arms".
Is cost still the primary driver for GCC expansion in India?
Cost advantages remain relevant, but they are no longer decisive. As AI becomes central to enterprise operations, companies are discovering that scale, talent depth and speed of execution matter as much as proximity to headquarters. Building large, AI-ready teams entirely in high-cost markets is proving expensive and slow. India's GCC ecosystem offers a unique combination: the ability to assemble large, cross-functional teams spanning AI, data, cloud, cybersecurity and enterprise systems at speed. "Talent density is becoming more important than talent cost," a Gartner analyst has observed, particularly as enterprises race to operationalise AI across core systems.
Why are US enterprises doubling down on India at this stage?
Several structural factors explain the timing. First, as Kunal Purohit, President - Next Gen Services at IT firm Tech Mahindra, said, AI has altered the economics of enterprise technology. Companies need teams that can train models, integrate AI into legacy environments, manage data pipelines and ensure regulatory compliance. Relying solely on vendors or building this capability in high-cost markets is inefficient. Second, data and regulatory complexity has increased. With tighter data protection rules globally, enterprises prefer to build in-house capability through captive centres rather than rely entirely on external partners. Third, geopolitical uncertainty has forced US companies to rethink technology supply chains, McKinsey Asia chair Gautam Kumra mentioned at the World Economic Forum's Annual Meeting in Davos in January. India is increasingly viewed as a trusted partner for long-term technology collaboration, not just an outsourcing destination. Finally, India's own digital ecosystem-from public digital infrastructure to enterprise SaaS adoption-has matured, making it easier for global firms to innovate locally and export solutions globally.
How important is policy alignment in sustaining this trend?
Policy support has played an enabling role. India's efforts to improve ease of doing business, clarify tax treatment for captives and encourage deep-tech and semiconductor investments have reduced friction for multinational firms expanding GCC operations. Vipul Joshi, CFO, ideaForge, told TechCircle that with the revised tariff of about 18 % by US on the Indian goods, the trade relationship between the two countries has gained fresh momentum. "Bilateral engagement between India and the US-covering critical technologies, semiconductors, AI, space and defence-has further reinforced confidence that technology collaboration will remain a strategic priority beyond short-term political cycles," he said.
For US firms, this matters. Large GCC investments are not easily reversible and require confidence in regulatory stability, talent availability and long-term alignment. "With vision and collaboration, India's GCCs are poised to lead the world in shaping the future of enterprise and society," remarked Avinash Joshi, Executive Managing Director, India, NTT DATA, Inc.
What challenges still remain?
Despite the optimism, risks persist. Talent costs in India are rising, particularly for AI and cloud skills. Attrition remains a concern as GCCs compete with IT services firms, startups and global product companies for the same talent pool. There is also a growing governance challenge. As India-based teams take on greater strategic responsibility, enterprises must rethink decision rights, accountability structures and operating models to avoid fragmentation. For India, the challenge is ensuring that GCC growth leads to deep capability creation, not just higher headcount-through sustained investment in research, leadership and ecosystem partnerships.
Is this a cyclical spike or a structural shift?
What is unfolding in 2026 is not a temporary surge driven by market conditions. It represents a structural recalibration of how global enterprises allocate capital, talent and control. Outsourcing has not disappeared, but it is no longer the defining feature of Indo-US tech ties. Instead, investment-led engagement, GCC-led innovation and shared technology ownership are becoming the new anchors. For India, this marks a transition from being the world's back office to becoming one of its technology nerve centres. The next phase will be defined not by how many centres are set up, but by how much strategic influence flows through them.
Published by HT Digital Content Services with permission from TechCircle.