GCCs in India: A Strategic Advantage for PE Firms

GCCs in India have solidified their position as a global powerhouse, offering private equity (PE) firms a distinct blend of strategic, operational, and financial benefits. The distinction of PE GCCs lies in their strong connection to value creation, setting them apart from traditional corporate centres.

With traditional entry barriers continuously lowering, mid-market and PE-backed companies are expected to contribute significantly to upcoming growth.

India: A Key Enabler for Global PE Firms

As global PE firms encounter increased demands for operational efficiency and enhanced market insights, India has emerged as a vital enabler. Transitioning from a mere cost-effective outsourcing option, it is now a key strategic hub for many PE firms aiming to strengthen their operational frameworks.

This transformation transcends mere cost reductions; it focuses on constructing institutional capabilities that integrate advanced technology, including AI, and rich talent pools at the core of decision-making processes, facilitating value creation.

The Importance of GCCs for PE Firms

In recent years, particularly the last five, there has been a fundamental shift prompting enterprises to adopt the GCC operating model. Companies now aim to cultivate capabilities and domain knowledge within their GCCs.

GCCs have gained significance for PE firms as they seek to deliver value that goes beyond traditional financial engineering. By establishing their own GCCs, particularly in a strategic location like India, PE firms can access a centralised, digitally advanced platform that propels various benefits including:

• Creation of new digital business models and revenue streams through fast-tracked digital innovation and transformation, supported by shared AI, digital products and analytics.
• Enhancement of earnings before interest, taxes, depreciation, and amortisation (EBITDA) by lowering costs while preserving agility and responsiveness.
• Access to a vast pool of digital and domain experts from India.
• Development of repeatable value creation mechanisms that can be integrated into the investment lifecycle, facilitating a more algorithm-driven process from diligence to exit.

What separates PE GCCs from traditional corporate units is their direct link to value generation. These centres enhance operational management by accelerating transformations across portfolio companies, thus improving the PE firms’ capacity to support active ownership models, reduce time-to-value, and achieve superior outcomes for limited partners.

Why India is the Preferred GCC Location for PE Firms

India has become the prime destination for GCCs and PE firms, providing a compelling amalgamation of strategic, operational, and financial incentives. Notable reasons include:

• A vast talent pool in digital sectors: India ranks second globally in AI skill penetration and contributes 31 percent of worldwide STEM graduates.
• An established GCC ecosystem: With more than 50 percent global market share and over 1,800 GCCs operating across various industries, PE firms can leverage a well-established network for best practices and talent.
• A favourable cost-quality balance: India offers considerable cost benefits without sacrificing quality or innovation.
• Supportive policies and robust infrastructure: Government incentives and strong digital architecture render India a low-friction location for setting up operations.
• A hub for innovation: Indian GCCs are not only about efficiency; they also serve as centres for product development, AI advancements, and business model experimentation.

For PE firms, establishing a GCC in India represents a strategic investment in a high-performance infrastructure that can amplify value across their portfolio.

The GCC Trend

What began as a focus for large multinational corporations is rapidly extending to include mid-market companies and PE firms, many of which are now actively launching GCCs in India.

Approximately 45 percent of the 1,800+ GCCs worldwide are linked to mid-market firms, a considerable number of which are PE-backed. Typically, mid-market GCCs in India start small, with teams ranging from 50 to 200 individuals, but focus on high-impact areas that directly bolster business growth and agility. These centres prioritize developing specialised capabilities that ensure speed, innovation, and cost-effectiveness.

Similarly, PE firms are integrating GCCs as core components of their global operations, executing various high-value functions such as:

• Investment research and market analysis
• Support for deal pipeline and due diligence
• Fund accounting and investor reporting
• ESG compliance and regulatory data oversight
• Technological architecture and cybersecurity
• Digital innovation and automation
• Real-time analytics to enable PE teams to track portfolio performance

Growth Projections

According to Deloitte CII forecasts, India’s GCC market is anticipated to expand from over 1,800 GCCs currently to as many as 5,000. Mid-market and PE-backed firms are set to represent a substantial share of this new growth, particularly as traditional barriers continue to diminish.

GCCs provide enhanced control, quicker access to insights, and a more robust operational framework to propel value creation, especially as the PE sector shifts towards more buyout-oriented deals. For India, this solidifies not only its role as a delivery hub but also as a key long-term strategic ally in the global PE landscape. Amidst escalating investment complexities and economic uncertainties, India’s significance in the PE playbook is both enduring and growing.