GCC is office success story. Now, focus on factory

Foreign direct investment (FDI) in China has gone mainly into manufacturing — initially labour-intensive and then hi-tech. Not for nothing it has earned the moniker of “the world’s factory”. FDI in India has come, and continues to do so, largely in services, making it “the world’s office” for global corporations. According to Finance Minister Nirmala Sitharaman, India now hosts 2,100-plus global capability centres (GCC) of over 500 of the Forbes top-2,000 companies. These GCCs together employ some 23 lakh professionals and generate nearly $100 billion in annual revenue. Moreover, they seem to have evolved beyond being cost-saving “back offices” handling basic IT, finance and customer services for multinational firms. Some of the GCCs have become strategic hubs for MNCs to build technology and enterprise platforms, undertake core engineering research and development, and work on clinical research and accelerated drug discovery using artificial intelligence. The GCC success story — India is home to half of such centres worldwide and adding one every day — is also reflected in the country’s external balance of payments profile. In 2025-26, its exports of services, at $421.3 billion, was close to the export of goods worth $446.1 billion. On the other hand, imports of goods ($783.4 billion) were way above the imports of services ($204.7 billion). Thus, while India recorded a merchandise trade deficit of $337.3 billion, it had a surplus of $216.6 billion on the services account. That’s a clear demonstration of where the country’s comparative advantage lies — not in factories, but in offices. The GCCs and the traditional Indian IT services companies are in the driver’s seat. There’s a flip side to this. The GCCs and Indian IT outsourcers are concentrated in Bengaluru , Delhi-NCR, Hyderabad , Chennai , Mumbai and Pune . Sitharaman wants them to come up more in Varanasi, Visakhapatnam, Mysuru, Tiruchirappalli and other tier-2 and tier-3 cities. That’s not easy. Like all industries, GCCs/IT firms tend to cluster around major metro areas that offer both robust infrastructure (international airports, dedicated office parks, reliable transport, power and utilities) and talent density (skilled engineers, developers and managers). Replicating this ecosystem in smaller centres may not be as feasible, unlike manufacturing clusters that can thrive in semi-urban and rural areas having lower land and labour costs. The constraint there is only physical infrastructure. India cannot afford to give up on manufacturing — whether textiles, leather, agro-processing, gems and jewellery — that alone can absorb the mass of its less-skilled workforce. India needs both factories and offices.