GCC Sector To See Slowdown In New Additions Amid Tariff Wars
The manufacturing and industrial sectors, particularly, might delay their decisions to establish GCCs in India.
The Global Capability Centre ecosystem’s growth is likely to see a gloomy first quarter, with slowdown in new GCC registrations due to uncertainty caused by tariff wars. The yearly projections will give a clearer idea on the slowdown, according to analysts.
This comes as businesses adopt a cautious approach amid fluctuating trade conditions. Since Donald Trump's re-election as US President, he has introduced a range of new policies that have heightened uncertainty for businesses. Notably, his back-and-forth tariff moves against major trading partners have contributed to this instability.
“Geopolitical movements are creating a degree of near-term caution, particularly as global enterprises reassess capital allocation in an increasingly volatile demand environment. Some global HQs are taking a more measured, phased approach to GCC expansion in India — not due to a lack of intent, but as a result of more deliberate decision-making in a complex macroeconomic landscape,” said Nilesh Thakker, president GCC business, Zinnov.
Market intelligence firm UnearthInsight predicts a temporary slowdown in registration of GCCs till June, but notes the commitment or year end number is likely to remain at 70 GCC as of now. So far in Q1 of CY25, India saw over 15 GCCs set ups.
In the short term, tariffs may lead to higher production and operational costs, prompting local manufacturers, banks, and mid-market companies to focus on cost optimisation. This could cause delays in decision-making for the establishment of GCCs, notes Gaurav Vasu, founder and CEO of UnearthInsight.
The growth of GCCs in India has been on a fast lane in the last couple of years. According to industry body Nasscom, as of 2024, the industry housed over 1,750 GCCs, employing 1.9 million professionals. The industry exports revenue now indicates an equal revenue split between Global MNCs (including GCCs) and Indian service providers.
The manufacturing and industrial sectors, particularly, might delay their decisions to establish GCCs in India. The expansion of present GCCs, too, could be put on the backburner now, as businesses will have to set their house in order, and understand new ways of working in a new world order, adds Vasu.
However, while the velocity of new setups or expansions may taper slightly, the value and complexity of work being transitioned to India is increasing. “By FY26, we expect momentum to pick up as enterprises reprioritise for resilience, innovation, and long-term transformation — all of which India is well-positioned to enable,” said Thakker.
