Global capability centres’ share in Indian IT exports reach 23 pc: Report

New Delhi, May 16 – 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.