India, June 5 -- When we talk about Global Capability Centres (GCCs) in India, the discussion often begins with a simple explanation: cost. While this explanation is partly correct, it is also incomplete. Understanding the rise of GCCs requires examining three structural questions: why firms create them, why India emerged as the dominant hub, and how the model is actively evolving from a cost-saving measure into a powerhouse of capability ownership.

The Strategic Value Proposition

Multinational companies establish GCCs based on three core economic drivers:

Cost Arbitrage: Companies can significantly reduce operating expenses by locating complex corporate functions in markets where highly skilled labor is available at lower relative cos...