MeitY to Assess AI's Impact on GCC Expansion
The central government will evaluate whether recent labor and tax reforms have accelerated GCC growth in India, and whether AI is affecting expansion, MeitY Secretary S. Krishnan said.
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The government will assess whether recent labor and tax reforms have accelerated the growth of global capability centers (GCCs) in India, and whether artificial intelligence is affecting expansion, Moneycontrol reported, citing ministry of electronics and information technology (MeitY) Secretary S. Krishnan.
Speaking at the CII GCC Business Summit in New Delhi, Krishnan said the central government and states had addressed several long-standing industry concerns around taxation, labor rules and ease of doing business, making it the right time to measure whether those changes had delivered results.
“Since so much was promised as an outcome of some of these changes, I think it’s important to start measuring what exactly has happened as a result of this, and whether the momentum of establishing GCCs has really picked up, and if not, is the concern about AI something which is worrying us,” Krishnan said, according to The Press Trust of India.
Krishnan said GCCs now account for nearly 2% of India’s GDP, while IT and IT-enabled services remain the country’s largest export sector at about $250 billion.
“We need to make sure that AI is deployed by a set of companies that we have come to know as GCC. It needs to be deployed in a manner that is meaningful and India’s inherent strength with regards to its human resources and cost advantages are effectively utilised,” he said.
Krishnan said enterprise AI adoption remains slower than expected globally, creating an opportunity for India’s GCC ecosystem to play a larger role in helping multinational companies deploy AI at scale.
“Deployment of AI in enterprises is still lagging, not just in India, but across the world. That is where GCCs in India will come in and play a significant role,” he said.
The remarks come as India’s GCC sector continues to expand rapidly. Nasscom and Zinnov said in a report that they expect India’s offshore technology centers to generate $98.4 billion in revenue in FY26.
India is expected to host 2,117 GCCs with a talent base of 2.36 million professionals in FY26, the report said.
While AI is expected to automate routine and repetitive work, Krishnan said it would simultaneously create demand for higher-value roles involving AI deployment, governance and enterprise integration.
He added that human expertise would continue to remain central to implementing AI applications and solutions, even as automation replaces lower-order tasks.
Highlighting workforce preparedness as a key priority, Krishnan said India must redesign education and corporate training programmes to equip professionals for AI-driven jobs.
The government, he said, is working with industry bodies on targeted skilling initiatives to prepare the workforce for the transition.
“How do you reorient skills in a new AI world? That will be a critical element of whether we are able to leverage AI and our strength in STEM human resources to truly become the AI solutions capital of the world,” Krishnan said.
The Union Budget 2026 proposed to consolidate software development, IT-enabled services, knowledge process outsourcing and software-related contract R&D under a single information technology services category, with a common safe-harbour margin of 15.5%. It also proposed raising the safe-harbour threshold for IT services from ₹300 crore to ₹2,000 crore.
