IANS | 17 May, 2024
The global capability centre (GCC) market is growing in India and the
overall share of GCCs in total IT exports from India increased from 18
per cent in 2015 to 23 per cent last year, a report showed on Thursday.
India
has 1,500-1,600 global GCCs which are offshore units established by
multinational companies to perform a range of strategic functions.
According
to HSBC Global Research, the revenue of GCCs has been growing at a CAGR
of 11 per cent since 2015 compared to 8 per cent for top five Indian IT
companies.
The report stated that GCCs' cost/head (including
salary cost and overheads) is 30-40 per cent higher than that of
internet service providers (ISPs) on average.
"This is due to an
inferior pyramid and higher like-for-like salaries at most levels.
However, as ISPs have a significant offshore markup (pricing over
costs), GCCs' cost/head is 20-25 per cent cheaper than the billing rate
of ISPs," the findings showed.
According to Deloitte, nearly 5,000 global leadership roles are currently in GCCs in India.
For
mature GCCs in the banking space, said the HSBC report, nearly 30-40
per cent of their global tech and operations staff are in India now and
"we believe this is a stable state".
So, some migration may
continue over the next 1-2 years, though beyond that as costs per head
escalate and GCCs' pyramid structure bloats, “there could be some value
migration back to ISPs”, the report mentioned.
