BizInsight Hub: UK-India FTA: Unlocking the Power of Global Capability Centres (GCCs)

UK-India FTA: Unlocking the Power of Global Capability Centres (GCCs)

- Dr. Sanjaykumar Pawar

Introduction
Understanding Global Capability Centres (GCCs)
India’s GCC Leadership: A Snapshot
The U.K.-India Free Trade Agreement: Context and Progress
Why GCCs Are Central to the FTA’s Promise
The Role of Policy and Regulation
State-Level Push: The Example of Uttar Pradesh
GCCs as Knowledge and Innovation Corridors
Challenges to Scaling GCCs Through the FTA
Conclusion: Forging the Future of Services Trade
FAQs

1. Introduction

In today’s rapidly evolving digital world, the United Kingdom and India are on the brink of a historic shift — not just in trade, but in how they collaborate across borders. As the two nations move closer to finalizing their ambitious UK-India Free Trade Agreement (FTA), attention is turning toward a less visible but game-changing force: Global Capability Centres (GCCs).

These centres — once viewed as cost-effective support hubs — have now transformed into innovation engines, powering everything from artificial intelligence and cybersecurity to R&D, tax strategy, and advanced analytics for global enterprises. India, already a global leader with over 1,500 GCCs employing 1.9 million professionals, stands poised to take this sector to even greater heights.

The proposed FTA could be a catalyst, unlocking seamless talent mobility, smoother digital governance, and enhanced UK-India collaboration in emerging tech. British companies are no longer just outsourcing to India; they are building strategic partnerships that shape the future of global services.

This is not just about trade. It’s about building a knowledge corridor — one that empowers both nations to lead in a digital-first global economy.

2. Understanding Global Capability Centres (GCCs)

In the modern global economy, where innovation and speed are everything, Global Capability Centres (GCCs) have emerged as a quiet powerhouse. Also known as Global In-House Centres (GICs), these strategic hubs are fully owned extensions of multinational companies — not outsourced vendors, but essential drivers of digital transformation.

From developing cutting-edge software and AI solutions to managing tax, finance, cybersecurity, and customer experience, GCCs play a critical role in how global businesses operate and grow. And nowhere is this trend more visible than in India, the world’s leading destination for GCCs.

With over 1,500 GCCs and 1.9 million professionals, India is not just offering cost savings — it's providing deep talent, domain expertise, and innovation at scale. According to NASSCOM and Zinnov, these centres added US$40 billion to India’s economy in FY 2023, and that number is expected to surpass US$60 billion by 2026.

Unlike outsourcing, GCCs offer full control, strategic alignment, and long-term value. They are the new nerve centres of global digital operations, especially for companies seeking speed, quality, and innovation from a trusted partner like India.

3. India’s GCC Leadership: A Snapshot

India is a natural powerhouse for GCCs, thanks to its technical talent pool, cost efficiency, English proficiency, and robust IT infrastructure. Over the past decade, GCCs in India have moved up the value chain:

Year	No. of GCCs	Employees (millions)	Focus Areas
2013	780	0.9	IT, BPO
2023	1,580+	1.9	R&D, AI, Cybersecurity, Legal, Tax Ops

(Source: NASSCOM, Zinnov, Deloitte India)

Over the past decade, India has quietly transformed into the global capital of Global Capability Centres (GCCs) — and it’s not just because of cost advantages. With a deep technical talent pool, strong English proficiency, and world-class IT infrastructure, India offers the perfect ecosystem for companies to innovate at scale.

From just 780 GCCs in 2013, India now hosts over 1,580 such centres, employing 1.9 million professionals in 2023 alone. The shift is clear — GCCs have evolved from handling basic IT and back-office tasks to driving R&D, AI, cybersecurity, legal operations, and tax strategy. This isn’t about outsourcing anymore — it’s about building strategic digital hubs.

Global giants like HSBC, J.P. Morgan, Barclays, British Telecom, and AstraZeneca are leveraging their Indian GCCs to lead in innovation and service excellence. And with over 120 U.K.-based companies already embedded in India’s services ecosystem, the upcoming UK-India Free Trade Agreement (FTA) could further unlock unprecedented collaboration and growth.

India’s leadership in the GCC space is not accidental — it’s a result of vision, investment, and the unmatched potential of its skilled workforce.

4. The U.K.-India Free Trade Agreement: Context and Progress

In a post-Brexit world, the United Kingdom has been strategically redefining its global trade relationships — and at the top of that list is India. The proposed U.K.-India Free Trade Agreement (FTA), now in its 13th round of negotiations as of mid-2025, is more than just a trade deal; it’s a blueprint for long-term collaboration in a rapidly changing global economy.

With bilateral trade already standing at over £36 billion annually, the FTA aims to unlock new opportunities across sectors — especially in services, technology, digital commerce, and professional mobility.

🌍 What the FTA Aims to Achieve:

🔽 Reduce tariffs on goods to boost exports and imports
🔓 Liberalize services trade, especially in fintech, legal, and IT
🌐 Enable smooth digital trade and cross-border data flows
🛂 Simplify visa and work permit processes for professionals
💼 Strengthen intellectual property (IP) protections to safeguard innovation

🤝 Recent Diplomatic Momentum:

U.K. Foreign Secretary David Lammy and Business Secretary Jonathan Reynolds visited India to reaffirm the FTA’s strategic importance.
At the 2024 G20 Summit in Brazil, Prime Ministers Keir Starmer and Narendra Modi emphasized their shared vision for an inclusive and tech-forward trade partnership.

This agreement is particularly crucial for enabling British businesses to expand into India’s digital economy, while Indian firms gain access to the U.K.’s high-value service markets. The FTA could serve as a launchpad for scaling Global Capability Centres (GCCs), making it a cornerstone for future-ready trade policy.

5. Why GCCs Are Central to the FTA’s Promise

At the core of the upcoming U.K.-India Free Trade Agreement (FTA) lies a powerful opportunity — to shift the focus of trade from traditional goods to high-value services, skills, and digital innovation. And Global Capability Centres (GCCs) are right at the heart of this transformation.

Unlike conventional outsourcing models, GCCs are strategic extensions of multinational corporations, operating with full control and high trust. These centres are not just handling routine tasks — they’re building products, driving research, and enabling innovation at global scale. That’s exactly why GCCs are poised to benefit the most from a well-negotiated FTA.

💡 Why GCCs Matter for the U.K.:

🔓 Access to India’s fast-growing digital economy: With 1,500+ GCCs already operating in India, U.K. companies can tap into world-class tech talent at scale.
💸 Cost-effective innovation: R&D, analytics, and product development can be expanded through India-based centres — at lower cost, with higher efficiency.
🌍 Global competitiveness: Partnering with India helps U.K. firms stay ahead in sectors like AI, cybersecurity, fintech, and life sciences.

🇮🇳 Why GCCs Benefit India Too:

💼 Increased U.K. investment: The FTA could attract British capital to India’s innovation and tech ecosystem, fueling new GCCs in Tier-2 cities.
🌐 Expansion of services exports: India can grow its digital and professional services exports to the U.K., a high-demand market post-Brexit.
👩‍💻 Employment and skilling boost: As GCCs expand, they drive job creation, specialized training, and innovation in India’s knowledge economy.

“The future of trade lies not just in goods but in services, skills, and technology.” — UKIBC

This vision aligns perfectly with both countries’ ambitions — the U.K.’s need to enhance global influence post-Brexit, and India’s drive to become a global hub for high-value digital services.

In short, GCCs are more than support centres — they’re strategic pillars of a new knowledge-based trade relationship between two innovation-led economies.

6. The Role of Policy and Regulation

India’s emergence as a global hub for Global Capability Centres (GCCs) has largely been driven by organic market forces — skilled talent, competitive costs, and a booming digital economy. Yet, as the UK-India Free Trade Agreement (FTA) nears finalization, there’s growing consensus that India must now formalize its support with a structured national GCC policy.

Why now? Because the potential is enormous — and coordinated policy action can unlock it further.

🏛️ Central Government Initiatives

The Ministry of Electronics and Information Technology (MeitY), along with Invest India, has already laid the foundation by forming a National GCC Taskforce. This group brings together India’s top tech and policy minds, including:

NASSCOM – India’s premier tech industry body
Zinnov – A strategic consulting firm deeply embedded in the GCC ecosystem
KPMG – A global advisor offering policy and governance insights

This taskforce is working to ensure India’s policies align with both industry realities and international best practices — especially as global trade rules shift through FTAs.

📌 Key Policy Priorities

To position India as the global leader for GCCs, policymakers are focusing on:

✅ Legal simplification around intellectual property, data security, and compliance
✅ Skilling programs to prepare the next generation of digital professionals
✅ Infrastructure development in Tier-2 and Tier-3 cities like Lucknow, Kochi, and Indore
✅ Professional mobility agreements to enable seamless talent exchange with countries like the U.K.

These reforms aim to reduce friction for foreign companies while strengthening India’s competitiveness in global services.

📊 What’s Next?

The highly anticipated Union Budget 2025 is expected to unveil India’s first national GCC framework, which would signal a new era of policy-backed growth. This aligns perfectly with the goals of the UK-India FTA — fostering a seamless ecosystem for digital trade, innovation, and shared prosperity.

With smart regulation and global alignment, India’s GCCs can move from being cost centers to global powerhouses of innovation and value creation.

7. State-Level Push: The Example of Uttar Pradesh

While national policy is gaining momentum, it's at the state level where the real innovation in promoting Global Capability Centres (GCCs) is beginning to take shape. One standout example is Uttar Pradesh (UP) — a state long associated with agriculture and manufacturing, now boldly stepping into the digital services and tech innovation arena.

Recognizing the economic potential of GCCs, Uttar Pradesh hosted its first-ever GCC Conclave under the banner of Invest UP. The event brought together global industry leaders like Microsoft, HCL, Tata Consultancy Services (TCS), and Standard Chartered, all exploring how UP can be their next strategic destination for tech-driven operations.

🚀 Why Uttar Pradesh is Gaining Attention:

🏗️ Infrastructure incentives: From plug-and-play office spaces to express connectivity and industrial zones
🌆 Focus on Tier-2/3 cities: Targeting emerging hubs like Lucknow, Varanasi, Kanpur, and Prayagraj for GCC expansion
🏢 Business-friendly perks: Offering benefits in land acquisition, tax exemptions, and electricity tariffs

This bold move marks a decentralization of India’s GCC ecosystem, long dominated by Bengaluru, Hyderabad, and Gurugram. UP’s approach not only relieves pressure on metro infrastructure but also spreads digital employment and innovation to underserved regions.

💡 What Makes This Strategic?

📈 Cost-efficiency: Tier-2 cities offer significantly lower operational costs without compromising on talent
🎓 Talent pool: UP is home to a vast, young, and trainable workforce, supported by top-tier universities and technical institutions
🤝 Public-private collaboration: The GCC Conclave is just the start — the state plans to build long-term partnerships with tech leaders

By creating an enabling environment, Uttar Pradesh is positioning itself as a next-generation GCC hub, directly contributing to India’s digital economy and aligning perfectly with the goals of the upcoming UK-India FTA.

The success of UP’s model could inspire other states to follow suit — creating a national network of innovation corridors that strengthens India’s position in the global services trade.

8. GCCs as Knowledge and Innovation Corridors

Gone are the days when Global Capability Centres (GCCs) were viewed as cost-saving back offices. Today, they stand tall as innovation engines, powering breakthrough research, product development, and digital transformation for some of the world’s biggest companies.

Take AstraZeneca’s GCC in Bengaluru, for example — it's not just managing operations; it’s driving advanced genomics research that directly feeds into the company's global pharmaceutical pipeline. This is the new face of India’s GCCs — deeply integrated into core business functions, delivering strategic value and cutting-edge innovation.

The proposed UK-India Free Trade Agreement (FTA) can take this further. By enabling seamless digital trade, cross-border R&D collaboration, and talent mobility between the two nations, the FTA has the potential to build a robust knowledge corridor — a two-way flow of ideas, innovation, and expertise.

In this corridor, capital isn’t the only currency. Data, creativity, and technical know-how will become the real drivers of value. GCCs will no longer just support global operations — they will define them.

As the U.K. and India prepare to sign a forward-looking trade deal, GCCs are perfectly positioned to become the beating heart of this innovation-led partnership.

9. Challenges to Scaling GCCs Through the FTA

While the upcoming UK-India Free Trade Agreement (FTA) offers huge potential for accelerating the growth of Global Capability Centres (GCCs), it must also address a set of pressing challenges. Unlocking the full power of GCCs will require thoughtful policy alignment, practical reforms, and long-term collaboration.

🔍 1. Double Taxation & Legal Complexities

One of the most common roadblocks for U.K.-based companies operating in India is navigating the complex, overlapping tax systems of both countries. Double taxation, inconsistent compliance rules, and lack of clarity around corporate structures create unnecessary friction. A comprehensive bilateral tax treaty, aligned with the FTA, could offer much-needed clarity and encourage deeper investments in the GCC sector.

🔐 2. Data Localization Mandates

India’s evolving data protection regulations often require companies to store and process sensitive data within national borders. While this enhances security, it raises infrastructure costs and complicates global operations. A harmonized digital governance protocol, ensuring privacy without stifling data flow, would ease these concerns.

✈️ 3. Professional Mobility Barriers

Skilled mobility remains a bottleneck. Visa delays, quota limits, and cumbersome documentation prevent efficient talent exchange — especially in fast-moving sectors like AI and cybersecurity. The FTA presents a chance to introduce smart mobility frameworks, similar to the U.K.’s youth mobility scheme, but expanded to cover tech professionals.

🎓 4. Talent Gaps in Emerging Tech

While India leads in talent volume, the demand for specialized, cross-functional skills in areas like quantum computing, biotech, and legal-tech is growing rapidly. Scaling GCCs will require diversity hiring, targeted skilling programs, and exposure to global best practices.

Addressing these barriers through the FTA would help both nations build a resilient, future-ready GCC ecosystem.

10. Conclusion: Forging the Future of Services Trade

The proposed UK-India Free Trade Agreement (FTA) is more than a diplomatic milestone — it’s a bold step toward redefining how two of the world’s most dynamic economies engage in the global services trade. At its core, this agreement isn't just about reducing tariffs or easing visa rules; it’s about shaping the future of knowledge economies.

In this new era, Global Capability Centres (GCCs) emerge as the unsung heroes — driving innovation, fostering talent, and enabling seamless collaboration across borders. With India’s unmatched digital talent and the U.K.’s deep expertise in research, finance, and governance, the two nations have everything it takes to build a services-led partnership for the 21st century.

By prioritizing digital trade, smart mobility, and regulatory harmony, the FTA can create a thriving innovation corridor. This isn’t just about enabling capital and goods to move — it’s about unleashing the power of ideas, data, and human potential.

Now is the moment for industry leaders, governments, and educational institutions to come together and co-create a blueprint for global value creation. A future not powered by factories alone, but by talent, technology, and trust — delivered from India, and driven by a shared global vision.

As the U.K. and India finalize this transformative agreement, GCCs will stand at the intersection of policy and innovation, proving that the future of trade lies in the exchange of knowledge and capabilities.

11. FAQs

Q1: What are GCCs and how do they differ from outsourcing?

Answer: GCCs are in-house, fully owned global service centers by multinationals, focusing on strategic functions like R&D, analytics, and finance — unlike outsourced vendors who provide services on contract.

Q2: How many GCCs currently operate in India?

Answer: As of 2023, India hosts over 1,580 GCCs, employing more than 1.9 million professionals.

Q3: What sectors do U.K. companies target through GCCs in India?

Answer: BFSI (Banking, Financial Services, Insurance), pharmaceuticals, retail, telecommunications, and emerging tech like AI and cybersecurity.

Q4: What benefits can the FTA bring to the GCC ecosystem?

Answer: Smoother regulatory compliance, streamlined visa processes, cross-border data flow standards, and greater investment facilitation.

Q5: Are Indian states involved in GCC promotion?

Answer: Yes, states like Uttar Pradesh, Telangana, and Karnataka are actively offering policies and incentives to host GCCs in Tier-2 cities.

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UK-India FTA: Unlocking the Power of Global Capability Centres (GCCs)

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