GCC as a Service
Build Operate Transfer(BOT) Model
Managed Teams
Until recently, most decisions about the location of a Global Capability Center were driven by instinct, legacy, or the familiarity of vendors. That concept changed after the Union Budget 2025-26 introduced India’s first national guidance framework for Global Capability Centers. It did not announce incentives, but it changed something more important. It’s the direction.
Once the center sent a clear signal, states responded quickly. Between 2024 and early 2026, nearly ten states either notified, drafted, or publicly announced dedicated GCC policies. Companies planning a Global Capability Center today often consult experts for consultation solutions.
The national benefits baseline
Before looking at state competition, there is a baseline every business should understand. India already offers a strong central-level foundation for Global Capability Center setups.
SEZ-registered GCCs continue to receive 100% tax exemption on export profits for the initial five years, subject to conditions. In financial services, GIFT City remains a strong outlier, offering a 10-year corporate tax holiday for eligible structures.
This is effectively the floor. Everything that states offer is based on this structure. For many companies evaluating global capability center India options, this baseline alone is already compelling, and state incentives simply tilt the economics further. For organizations exploring why is India the first choice for a GCC setup, this infrastructure defines its viability.
State-by-state policy map
The actual transformation is already underway at the state level. Currently, around ten states have shown promising progress as prominent GCC hubs.
1. Karnataka
As one of the most mature hubs for GCCs, Karnataka hosts initiatives beyond Bengaluru. The state has set a target for 500 new GCCs with 45-day approval periods.
2. Telangana
Telangana has planned 120 new GCCs by 2026. The focus largely lies on AI and R&D-based operations.
3. Tamil Nadu
In Tamil Nadu, GCCs benefit from capital support like land cost incentives up to 50% in select corridors like Coimbatore and Madurai.
4. Maharashtra
Maharashtra has set a target for 400 GCCs with R&D grants and support linked to payroll. The launch of these GCCs has been announced, but the policies are yet to be gazetted.
5. Gujarat
The strong environment and infrastructure around the GIFT City offer reimbursements and digitized approvals.
6. Andhra Pradesh
The state offers capital subsidies up to 25% and rental reimbursements up to 50%.
7. Odisha
The GCC development in Odisha focuses on five hubs. An investment push for INR 1,000 crore has been made, along with concessional support for land.
8. Uttar Pradesh, Madhya Pradesh, Haryana
The draft frameworks are at an early stage. Although the direction is clear, some changes may still be made.
For companies working with a global capability center consultant in India, the process becomes significantly streamlined.
The compliance traps most companies miss
Incentives apparently look simple, but in reality, they are tightly conditional. Most states include domicile-linked payroll conditions. If classification is wrong, recovery provisions can apply later. Claim windows are also strict. In many cases, missing the filing timeline means losing the benefit entirely.
Some states, such as Karnataka, Andhra Pradesh, and Gujarat include clawback clauses. If a Global Capability Center shuts down within a defined period, incentives must be returned.
This is where many companies misjudge risk. Draft policies, particularly in states like Maharashtra or Haryana, should never be treated as guaranteed financial inputs. Any global capability center setup India plan built on them needs caution, not assumptions.
The Tier-2 opportunity
The shift toward tier-2 cities is no longer theoretical. Tier-2 GCC share has moved from 5% in 2019 to 7% in 2024. By 2030, the number is expected to reach 25 to 30%. Cities like Coimbatore, Indore, Ahmedabad, Vadodara, and Bhubaneswar are now appearing directly in state policy lists.
The interesting part is the cost. A 200-FTE Global Capability Center in these cities can operate at 25% to 30% lower cost over three years compared to Bengaluru, even before incentives are applied.
This is why businesses are exploring global capability center setup services based on both talent and infrastructure analysis.
How to read this as a decision-maker
The biggest mistake companies make is treating all policies as equal. They are not, because:
- Notified policies are ready for execution
- Draft policies are directional
- Announced policies lie somewhere in between
That difference matters more than headline incentives.
Decisions about the location of a Global Capability Center should be driven by hiring requirements, the type of function, and long-term scale, not just subsidy value. For example, Karnataka and Gujarat currently offer more predictable single-window systems compared to emerging states.
This is also where firms like Xpansa typically step in, particularly when companies are comparing multiple states for a global capability center setup India strategy.
From the GCC Desk
Three patterns stand out across recent developments.
- States are now publicly competing for GCC announcements, not just manufacturing or IT investments.
- In 2025, state incentives were considered secondary by at least one major GCC expansion.
- Upgrades in infrastructure in tier-2 cities are being fast-tracked in cities like Indore and Bhubaneswar to cater to the incoming demand.
Considering these trends, the policy environment shows active competition.
Conclusion
Choosing the right state is no longer a simple cost comparison. It is a multi-variable decision involving talent, compliance, infrastructure, and policy maturity. If you are evaluating a Global Capability Center location strategy, it’s logical to structure the decision early rather than react later. This is where professional advisory support from Xpansa has become relevant for companies. Explore how Xpansa helps businesses navigate this environment before finalizing your location commitments.
Author Bio:
Aishwarya Shiva is a Manager, Business Partnerships, specializing in GCC advisory and partnership-driven business growth. She collaborates with B2B and B2C partners to support global companies establishing and expanding their operations in India.
