Volatile geopolitics slows GCC in March

New Delhi: Volatile global geopolitics is impacting the pace of new technology centre openings in India as multinationals weigh their business strategies.

A total of 63 global capability centres (GCCs) opened in the March quarter, slowing from 74 a year earlier, according to a report by UnearthIQ, part of market researcher UnearthInsight. Though the count of companies setting up greenfield GCCs rose to 28 last quarter from 24 a year earlier, project discussions have tapered off with the start of the Iran war.

"Brownfield activity dropped 30% in Q1 2026 as macro uncertainty pushed existing GCCs to hold back on expansion," said Gaurav Vasu, founder at UnearthInsight. He said should geopolitical uncertainties ease, the number of greenfield GCCs could reach 100 in 2026, almost unchanged from 2025. To be sure, while macro uncertainties have affected setting up of new GCCs, their overall industry value, including revenue, scale of operations, and capability expansion is steadily rising.

TeamLease Digital projected India's GCC ecosystem to grow at 18-22% annually. Nasscom had pegged GCC revenues in India at $64.6 billion in FY24. While the software industry body is yet to publish updated figures for FY25 or FY26, industry estimates suggest the market is likely to cross $80 billion last fiscal year. The overall IT industry growth is estimated at around 6% in FY26.

Two-way redistribution

Experts pointed out that the GCC boom has created a dual-pronged redistribution structure rather than outright displacement of IT services firms.

"GCCs are creating new demand and also taking share from IT service providers," said Pareekh Jain, CEO at EIIR Trends, a research platform on engineering and R&D services.

Industry estimates showed 30-50% of work moving into new GCCs would earlier have gone to IT services vendors. However, 40-60% of GCC growth is being driven by entirely new capabilities in AI, product engineering, and digital platforms-work that was never part of the outsourcing market to begin with.

At the same time, contracts are also flowing back to IT services firms. Wipro acquired Olam's GCC, Infosys acquired Danske Bank's GCC, HCLTech took over HPE Communication Group, and Virtusa acquired Wiley's GCC, noted Jain.

He cited the instance of Danske Bank to point to the two-way relationship between GCCs and IT vendors. The lender outsourced work to ITC Infotech in 2006, built its own GCC in 2014, moved work in-house, and then sold the GCC to Infosys in 2023. "This is a cyclical trend," Jain said. "Companies alternate between GCC and third-party models based on company-specific or industry-specific situations." Vikram Ahuja, co-founder at ANSR, said the bigger change is not about the scale of work being moved but the scope of work itself. "Enterprises are retaining core, IP-led work in-house, while relying on partners for scale, speed and specialised capabilities," he said.

Industry estimates showed that 40-60% of GCC growth is originating from new capability creation rather than vendor substitution. Ahuja highlighted that areas such as AI, product engineering and digital platforms are driving most of the expansion.

Despite the current setbacks, Vasu at UnearthInsight expects greenfield GCC expansions to continue as more firms use India to build technology, R&D, and AI capability centres.