Global Capability Centres (GCCs) in India

A global capability centre (GCC) is an offshore unit that a company owns and runs itself, rather than renting through a vendor, to deliver technology, operations, analytics or R&D for the wider group. India hosts 2,117 GCCs employing about 2.36 million people, according to the nasscom–Zinnov GCC Value Orbit report published in July 2026.

For a £2–50m UK business the useful question is not "should we have a GCC?" but "has our India work become important enough to own?" This article sits within our wider guide to setting up a company in India from the UK, which covers entry routes, FDI and tax in more depth.

Key points

• A GCC is a company-owned centre in India, usually a wholly owned Indian subsidiary, doing work for its overseas group.

• India had 2,117 GCCs and about 2.36 million GCC professionals in FY26 (nasscom–Zinnov, July 2026). Over 480 GCCs belonged to mid-market parents in 2025 (Zinnov–nasscom).

• A 30–100 person centre is realistic for a £20–50m UK company. You do not need to call it a GCC.

• The structure follows what India actually does: routine delivery is usually paid cost plus; real R&D or product ownership changes the transfer pricing and IP picture.

• Since 1 April 2026, India's Income-tax Act 2025 applies, and IT services captives can elect a 15.5% safe harbour margin (Union Budget 2026–27).

What is a global capability centre?

A global capability centre is a captive operation that a company sets up in another country to perform functions for itself, using its own employees, management and processes. The term replaced older labels such as "captive centre" and "global in-house centre", and reflects that many centres now do far more than back-office work.

A typical centre starts with one function, such as software engineering, analytics, cybersecurity, finance operations or customer support, and widens over time into product and R&D work. Legally, most GCCs are an Indian private limited company owned by the overseas parent, which employs the team and invoices the group under an intercompany services agreement.

Why are GCCs booming in India?

GCCs are growing in India because of talent depth, a mature supplier ecosystem and an increasing willingness among parents to place senior, product-level work there. The nasscom–Zinnov GCC Value Orbit report (July 2026) puts the FY26 picture at:

• 2,117 GCCs operating 3,728 units

• about 2.36 million professionals and USD 98.4 billion in market revenue

• 506 Forbes Global 2000 companies with Indian GCCs

• over 1,200 GCCs with embedded AI/ML capabilities

Policy is pushing the same way. Karnataka's GCC Policy 2024–29 (November 2024) is widely described as India's first dedicated GCC policy and targets 500 new centres by 2029. Gujarat, Maharashtra and Madhya Pradesh followed in 2025, and the Union Budget 2025–26 announced a national framework to help states attract GCCs to tier-2 cities.

For UK companies, two changes took effect on 15 July 2026: the UK–India Comprehensive Economic and Trade Agreement (CETA), with chapters on services, digital trade and business mobility, and the Double Contributions Convention, under which qualifying detached workers can stay in their home social security scheme for up to 60 months.

Can a mid-sized UK company build a GCC with 30–100 people?

Yes. A UK company does not need to be a multinational to own its India capability, and the mid-market segment is now a large part of the market. The Zinnov–nasscom Mid-Market GCC Report 2025 counts over 480 mid-market GCCs (parents with roughly USD 100 million to 1 billion in revenue) employing more than 210,000 professionals, about 27% of India's GCC landscape, with 35% set up in the two years to FY25.

Many £20–50m UK firms sit below that band, but the logic holds. Take a £15m UK consultancy with 40 developers in India supplied by a vendor at about £2m a year.

The better question is not whether an Indian office would be cheaper, but whether India has become strategic enough to own: direct hiring, retention, control over IP and functions the vendor contract never covered. Our guide on whether to build your own offshore team in India or stay with a vendor works through that decision in detail.

The acquisition route deserves its own analysis. Buying a ₹30–100 Cr Indian specialist can deliver a team, customers and local leadership in one step; see our guide to acquiring an Indian company as a UK business.

Which Indian cities are best for a GCC?

There is no single best city: the right choice depends on the skills you need, your sector's existing cluster and how senior the work will be. Zinnov's city analysis (June 2026) shows six metros hold almost all GCC scale:

Zinnov also notes expansion into tier-2 cities such as Coimbatore, Indore, Jaipur, Ahmedabad, Chandigarh, Bhubaneswar and Vadodara, citing engineering talent, lower attrition and lower operating costs. For a first 30-person centre, a tier-1 city usually makes hiring a senior site leader easier; tier-2 cities suit a second phase.

How should a UK company structure a GCC in India: entity, transfer pricing and IP?

Most UK companies use a wholly owned Indian private limited company, because it ring-fences Indian employment, payroll and tax in a local entity. FDI in IT and IT-enabled services is generally permitted up to 100% under the automatic route (DPIIT FDI Policy), so no prior government approval is usually needed, though the share issue must be reported under FEMA.

Corporate tax. Since 1 April 2026, India's Income-tax Act 2025 has replaced the 1961 Act. A domestic company can generally elect the concessional 22% base rate (section 200, formerly section 115BAA), about 25.17% with surcharge and cess.

Transfer pricing. The UK parent pays the Indian company for its services, and that price must be at arm's length under sections 161–173 of the 2025 Act (formerly sections 92–92F). A routine delivery centre is commonly remunerated on cost plus a mark-up.

From tax year 2026–27, software development, ITeS, KPO and software-related contract R&D are grouped as "Information Technology Services" with a common safe harbour margin of 15.5% on operating costs, for eligible transactions up to ₹2,000 crore, approved through an automated process and available for five years at the taxpayer's choice (Union Budget 2026–27, PIB, 1 February 2026). Our guide to transfer pricing in India for captive centres covers when safe harbour is worth electing and when it is not.

IP. If the Indian team moves into core engineering, AI or product decisions, routine cost plus may no longer reflect reality. Who funds development, who controls the roadmap and where DEMPE functions (development, enhancement, maintenance, protection and exploitation of intangibles) happen will drive the IP position and India's share of profit.

GST. Services from the Indian centre to the UK parent can generally be zero-rated exports if the conditions are met. The Finance Act 2026 omitted section 13(8)(b) of the IGST Act from 30 March 2026, removing the long-running "intermediary" risk for captives doing sales support or coordination.

Permanent establishment. Under Article 5 of the India–UK tax treaty, a UK company furnishing services in India through its employees can create a service PE if activities exceed 90 days in any 12-month period, or 30 days where the services are for a related enterprise. Secondments and visiting UK managers need careful contracts and cost flows.

Compliance. Plan for the recurring obligations set out in the FAQ below, and note that at least one director must have stayed in India for 182 days or more in the previous calendar year.

The Greenwolf view

India can lower your cost base, but that is probably the least interesting reason to build there. For the right UK company, India can be a customer market, a capability base, an R&D engine or all three. Commercial design comes first. Tax follows functions, risks and substance, not the other way round.

Before incorporating anything, we ask six questions:

1. What will India do in 12 months and in 36 months? A QA team and a product engineering hub need different structures.

2. Who directs the work and carries the delivery risk? That answer drives the transfer pricing model.

3. Will India create or improve IP? If so, decide IP ownership and remuneration before the first line of core code is written in India.

4. Will the same entity also sell to Indian customers? Mixing a captive and a commercial business in one company changes tax, GST and pricing.

5. How will UK people move? Use the Double Contributions Convention and plan secondments around PE risk.

6. What is the end state? A captive you might sell, a UK–India business with two operating centres, or a platform for acquisitions.

The structure should fit today's role for India and leave room for the next one.

Planning an India capability centre? Get the UK–India corridor checklist, or book a 30-minute structuring call with Greenwolf Advisors to test which India model fits your business today.

This article is general information, not advice for a specific case. Rules change; please take advice on your own facts before acting.