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Set up an India global capability center (GCC) by defining its work and decision rights first, then evaluating the operating structure, foreign-investment rules, city, SEZ fit, intercompany pricing, and people and governance requirements. A GCC is an operating model—not a specific Indian legal form—and the right choices depend on the activities the center will actually perform.
What a GCC in India can do
A global capability center is an operation established by a multinational to serve its parent company and affiliates. Its scope can include IT, product engineering, research and development, finance, analytics, customer operations, and other business services. A center may begin with defined delivery work and take on broader engineering, innovation, or decision-making responsibilities as its mandate develops; that evolution should be an explicit business choice, not an assumption attached to the GCC label.
India Briefing’s June 10, 2026 guide reports figures attributed to government sources: more than 1,700 GCCs, about 1.9 million professionals, and US$64.6 billion in revenue in FY 2023–24. The guide also reports revenue of US$40.4 billion in FY 2018–19. These figures describe the wider ecosystem, not the likely size, cost, or performance of a particular company’s center. A Press Information Bureau backgrounder dated December 11, 2025 separately states that India had more than 1,700 GCCs and describes a shift toward engineering R&D, including aerospace, defence, semiconductors, and advanced manufacturing.
Define the mandate before choosing a city
Write down what the India operation will own, who it will serve, and how its work will connect to the parent company. A clear mandate makes later choices—hiring, location, systems, governance, and the intercompany arrangement—more concrete.
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- Work scope: Identify the services, products, or capabilities the center will deliver, and distinguish them from work that remains elsewhere.
- Decision rights: Specify which decisions local leaders can make and which require parent or affiliate approval.
- Service recipients: Name the parent and affiliate teams that will use the center’s work, and define how priorities and service expectations will be set.
- Information and outputs: Map the data, systems, intellectual property, and other outputs the work requires or creates, and how they move between the center and related entities.
- Expected maturity: Decide whether the center is intended to remain a delivery or shared-services operation or grow into a broader engineering, R&D, or innovation role.
Choose a structure and verify foreign-investment treatment
“GCC” does not prescribe an entity form. Compare possible structures with qualified Indian legal and tax advisers against the intended ownership and control, activities, governance, funding, allocation of risks, and continuing obligations. The available official material does not establish one legal form as suitable for every GCC.
Assess foreign-investment eligibility against the center’s actual activities, not just its name or its parent company’s industry. The Reserve Bank of India’s Master Direction – Foreign Investment in India, displayed as updated January 20, 2025, describes up to 100% foreign investment on the automatic route for activities not listed in Schedule I and not prohibited, subject to applicable laws, rules, regulations, security conditions, and other requirements. Activities listed in the schedule may have sectoral caps or approval conditions, and the direction identifies additional treatment for financial services. Check the current direction and applicable sectoral rules when planning the investment; the general rule is not a blanket determination for every GCC activity.
Compare cities against the center’s needs
The Press Information Bureau backgrounder identifies Bengaluru, Hyderabad, Pune, Chennai, Mumbai, and the National Capital Region as major GCC clusters. Treat this as a shortlist for evaluation, not a ranking. The sources do not provide a reliable, comparable city-by-city cost assessment or establish one best location for all centers.
Compare candidate locations using the same mandate-specific criteria:
- Availability of people with the skills and leadership experience the center needs.
- Relevant industry networks and access to the parent company’s stakeholders.
- Office availability, infrastructure, and the practical needs of the operation.
- Resilience and the ability to recruit and grow the center over time.
Make the comparison with the roles the center actually needs to fill and the operating conditions it requires; a city’s general reputation is not a substitute for that assessment.
Decide whether to apply for an SEZ unit
An SEZ may be relevant to a center serving overseas entities, but eligibility and operating conditions need to be confirmed for the specific activity and unit. Distinguish an application to establish an SEZ from an application to operate a unit within an existing SEZ; they are different procedures.
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- Setting up an SEZ: The Department of Commerce’s “How to Apply: Special Economic Zones in India” page describes a zone-level proposal using Form A, involving a State Government recommendation and the Board of Approval.
- Setting up a unit in an SEZ: Falta Special Economic Zone’s “Procedure to Set Up a Unit” page describes a unit-level application using Form F to the Development Commissioner, with a copy to the developer. It lists incorporation documents and a project report among the materials. The page displayed an update date of August 11, 2026.
A company seeking space in an existing zone should confirm the current unit process, eligibility, and operating conditions with that zone. Do not treat zone-level approval steps as the unit application procedure, or assume that an SEZ is automatically the right fit for the center.
Document the intercompany services and pricing model
Before the Indian operation begins providing services to related entities, document what it does and how the arrangement works. The Income Tax Department’s “Transfer Pricing” guidance says transfer-pricing provisions apply where an assessee has an international transaction with an associated enterprise, or a transaction involving a person in a notified jurisdictional area.
Build the analysis around the actual arrangement, including:
- Functions performed by each entity, assets used, and risks assumed.
- Contractual scope, service recipients, and how responsibilities are divided.
- The pricing approach and the records supporting it.
Tax treatment, documentation, and any safe-harbour provisions depend on the transaction and relevant tax period. Do not assume a single margin or pricing method applies to every GCC; review the arrangement with qualified tax support.
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Turn the mandate into a people and operating plan: identify priority roles, leadership responsibilities, the capabilities to recruit, and how the India team will coordinate with its global stakeholders. Set out the governance needed to manage the center’s services, controls, and decision-making as its scope develops.
Employment, payroll, data, and other local obligations depend on the company’s activities and location. Confirm the applicable requirements with appropriately qualified advisers rather than treating a general GCC checklist as a complete compliance inventory. The setup decision continues after formation: the center must be able to operate under its agreements, governance arrangements, and parent-company expectations.
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Use decision gates to keep the setup grounded
Before committing to a structure or location, make sure the company can answer these questions with evidence specific to its intended operation:
- Is the center’s work, authority, and service boundary clear to both its India team and global recipients?
- Have the actual activities and ownership been checked against current foreign-investment conditions?
- Does the chosen city match the roles, ecosystem, facilities, and resilience needs identified for the mandate?
- If considering an SEZ, has the company confirmed the relevant unit-level procedure and operating conditions with the zone?
- Are the intercompany functions, risks, contracts, and pricing approach documented for tax review?
- Can the planned leadership, hiring, governance, and compliance arrangements support the intended scope?
Setup costs, launch timelines, registrations, and the best legal or tax outcome are company-specific; the cited sources do not establish universal figures or answers for them.
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