India Becoming the Hub of Global Capability Centers

Dr. Jayantilal Bhandari

According to the recent India GCC Landscape Report published by NASSCOM and Zinnov, India is emerging as the largest hub for Global Capability Centers (GCCs) in the world. Currently, there are 1,700 GCCs in the country, providing employment to over 2 million people. The market size of GCCs in India is ₹5.4 lakh crore, which is expected to grow to ₹8.4 lakh crore by 2030. Fifty percent of the world’s GCCs are located in India. The contribution of GCCs to India's GDP is currently 1% and is expected to reach 3.5% by 2030. It is noteworthy that Global Capability Centers, or GCCs, represent a new trend in the job market, focusing on IT support, customer service, finance, HR, and research and development.

Around the world, various countries’ governments are also crafting policies to strengthen their global industrial-business relations, keeping GCCs and the Global Innovation Index in mind. In India, rapid developments in fields like the Internet of Things, Artificial Intelligence, and data analytics, along with a thriving startup environment, are prompting large companies from the US, Europe, and Asia to establish their Global In-House Centers (GICs) at a fast pace. The rapid growth of the Global Innovation Index has also led globally recognized finance and commerce companies to expand in India. “Made in India” and “Brand India” are becoming prominent worldwide.

There is no doubt that the use of India’s talent pool by large global companies through GCCs is increasingly contributing to transforming India into a major knowledge-based and service-oriented economy. According to the World Intellectual Property Organization’s (WIPO) World Intellectual Property Indicators (WIPI) report 2024, India has secured a position among the global top 10 countries for three major intellectual property rights (IPRs)—patents, trademarks, and industrial designs. Intellectual property includes inventions, creative works, artistic works, designs, copyrights, patents, trademarks, research, and innovation. Globally, India is making strong efforts to curb copyright infringement, issuing dynamic injunction orders to prevent copyright violations. Additionally, India has also made significant progress by offering IP-based tax incentives and creating awareness about counterfeit products.

Notably, India ranks sixth globally for patents with 64,480 applications. This is a first for the country. The Patent Office has granted 149.4% more patents in 2023 than in 2022. The report also shows a 36.4% increase in industrial design applications in India, in line with the growth of product design, manufacturing, and creative industries. Between 2018 and 2023, the number of patent and industrial design applications more than doubled, while trademark filings increased by 60%. Globally, India ranks fourth in trademark filings, with a 6.1% increase in 2023. India’s trademark office ranks second globally for active registrations, with more than 3.2 million trademarks in force, highlighting the country’s strong position in global brand protection.

Similarly, other global organizations’ reports on intellectual property, research, and innovation continue to show India’s rising position. In the 2024 Global Innovation Index (GII) published by WIPO, India ranked 39th among 133 economies. It is remarkable that India, which ranked 81st in the GII ranking in 2015, has now reached the 39th position. India’s progress in the GII ranking is being highlighted globally. Under GII 2024, India ranks first among low-middle-income economies and also leads in the Middle and South Asia region. India is ranked fourth in the science and technology (S&T) cluster ranking, with major cities like Mumbai, Delhi, Bengaluru, and Chennai listed among the world’s top 100 science and technology clusters. Furthermore, India ranks seventh globally in intangible asset intensity. Notably, the US Chambers of Commerce’s Global Innovation Policy Center’s annual report on the 2024 Global Intellectual Property Index ranks India 42nd among the world’s 55 major economies.

It is important to note that intellectual property, research, and innovation have multifaceted benefits. These factors play a crucial role in attracting entrepreneurs and businesses from various countries to make decisions regarding starting industries and businesses in a particular country. While the growing role of intellectual property, research, and innovation in India’s development is evident, increasing investment in this area by both the government and private sectors is essential to further enhance this progress. Currently, India spends only about 0.67% of its GDP on research and development (R&D). In contrast, around 2% of the global GDP is spent on R&D. India needs to bring changes to its industrial structure, make its companies more competitive, use trade policy to encourage competition among companies, and transform the public research system.

We hope that, in light of the GCC Landscape Report 2024 and the WIPO’s WIPI Report 2024, along with other reports on intellectual property, research, and innovation, the government will take steps to further elevate intellectual property, research, and innovation in the country. This will attract more GCCs to India from around the world and help the country achieve its larger goals of becoming the third-largest economy by 2030 and a developed country by 2047.

(Author is a renowned economist.)