CEA Nageswaran Pushes GCCs On AI Skills

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Indian industry must step up investment in skilling, capability building and innovation to help global capability centers (GCCs) respond to the disruption caused by artificial intelligence, Chief Economic Adviser V Anantha Nageswaran said on Thursday.

Speaking at the CII GCC Summit, Nageswaran said the government had done its part through Budget measures aimed at supporting the sector, The Economic Times reported. 

The next phase, he said, would depend on how companies use that policy support to build a stronger and more future-ready talent base.

The remarks come as India’s GCC industry moves into a more difficult phase. For years, GCCs in India were built around a clear advantage: skilled talent at scale and lower cost. That model is not disappearing, but it is changing quickly as AI alters the way global companies think about work, headcount and productivity.

India is already the world’s largest GCC hub. A 2026 Nasscom-Zinnov report said the country has more than 2,100 GCCs, employing 2.36 million people and generating nearly $100 billion in revenue.

What began largely as a back-office and support model has moved into product development, analytics, corporate functions, engineering and research.

That shift has made GCCs more valuable, but also more exposed. AI is allowing companies to do more work without adding people at the same pace. It is also raising demand for advanced skills in machine learning, automation, cybersecurity, data engineering and domain-specific AI deployment.

Moreover, Nageswaran cautioned that companies will now need to move beyond execution-focused business models.

“These centers first came to India for cost. They stayed for capability,” he said, adding that many GCCs are now locations “where global decisions are made.”

Nageswaran acknowledged that AI will increasingly automate routine, repetitive and rule-based tasks, exposing business models built primarily around low-cost execution. However, he argued that AI is also creating demand for higher-value roles centered on designing, deploying, testing and governing AI systems.

“Artificial intelligence does not build, deploy or govern itself. Someone has to design these systems, train them, test them, correct them and hold them to account,” he said.

Rather than reducing the importance of GCCs, AI can increase the value of skilled professionals, provided organizations continue investing in capabilities, he added.

“AI does not empty these centers. In the centers that are run well, AI raises the value of each person who works there. The centers that stand still will suffer. The centers that move up will thrive.”

Highlighting government initiatives to support the sector, Nageswaran said the Budget expanded the transfer pricing safe harbour regime for GCCs by introducing a uniform margin, higher eligibility thresholds and faster multi-year approvals, providing greater tax certainty for companies.

He also pointed to the government’s national framework aimed at encouraging GCC expansion beyond the six major metropolitan cities into tier-II and tier-III locations.

“This is not only an economic goal; it is a matter of fairness. The opportunity should not sit in a few metros alone,” he said.

At the same time, Nageswaran stressed that policy support alone cannot secure India’s long-term leadership in the sector.

“The government can build the runway, but it cannot fly the plane. The move from cost to capability, from execution to innovation, has to be made by firms and by people,” he said.