'Solutions developed in India are being commercialised and offered globally because we're executing at scale, creating new markets and revenue streams.'
In this two-part interview with Prasanna D Zore/Rediff, Monica S Pirgal, CEO of Bhartiya Converge, reveals how tier-2 cities are becoming GCC magnets with government support and local talent pools.
She also reveals why metros still dominate leadership roles, the hub-and-spoke model's success, and India's evolution from cost-driven back offices to strategic innovation hubs powering Fortune 500 companies.
India's GCC industry is projected to reach $100 billion by 2030. From your perspective as someone who has led GCCs for global firms, what explains the accelerated confidence that global CEOs now have in India?
There are two key aspects to consider: The global scenario and what India offers globally. External factors such as supply chain concerns and tariff situations have created significant pressure on global businesses to either increase their top line or reduce operating costs to impact their bottom line positively.
As global CEOs seek solutions to these challenges, GCCs represent one of the best options available.
The confidence stems from proven success -- approximately 30 of the Fortune 500 companies have already established their global capability centres in India. This success is built upon India's strategic investments over the past 30 years in education, coupled with our English-speaking population, lower labour costs, and labour arbitrage advantages.
When you combine all these elements, it creates a highly successful formula for executing global work at reduced costs with the right talent arbitrage.
India now possesses well-trained talent that has matured over three decades of working in various GCCs. These professionals have progressed to senior leadership roles and possess deep industry understanding, enabling them to help global CEOs execute plans and visions crafted at global headquarters but implemented from India.
Additionally, our startup culture has significantly accelerated this trend. Bootstrapped and highly agile startups are developing solutions that global organisations can implement through GCCs at substantially lower costs, with innovation at the forefront of these startup communities.
Would you say that cost arbitrage is the most important reason why global companies establish GCCs in India?
No, that narrative was predominantly relevant about two decades ago, particularly in the early 2000s around 2005. During that period, large Banking, Financial Services, and Insurance (BFSI) companies came to India primarily for cost arbitrage because we had abundant deployable talent, and the salary differential was substantial.
However, the landscape has transformed dramatically. The same talent that started working two decades ago has now become very senior and requires no training -- it's essentially plug-and-play. Professionals are ready from day one and can deliver immediately. In contrast, back in 2004, when costs were lower, employers had to invest in training periods to prepare talent.
Today, cost arbitrage is completely secondary. Whilst it remains one of many driving factors, the primary attractions are our trained talent landscape, innovation mindset, and global exposure working with international setups.
The cultural understanding of working with US and UK companies -- including requirements, time zones, and business practices -- cannot be developed overnight. This expertise now plays a crucial role in CEOs' decisions to look towards India for solutions to problems being discussed in their boardrooms.
In the early years, GCCs were often dismissed as back-office centres. How have you seen their role transform, and what does this shift mean for global boardrooms?
You're absolutely correct. Twenty to thirty years ago, when work initially moved to India, the country was still being explored as a viable geography -- it was largely trial and error for global companies. With this experimental mindset, companies weren't willing to send leadership or transformational work to India. The approach was to have larger teams at headquarters with smaller extensions in India, simply executing tasks under guidance.
This led to the terminology of 'outsourced' versus 'captive' models, where captive centres had dedicated talent working exclusively for one account, unlike tech services where talent worked across multiple brands.
Today, with talent maturity and India's global readiness, the Indian workforce has become more globally oriented than many actual global MNCs themselves.
Many companies in the UK and US haven't ventured outside their own countries for business or talent leverage, whilst India has extensive experience with numerous GCCs, making us exceptionally prepared for global work requirements, time zones, and cultural nuances.
This maturity now drives innovation and transformations, with ownership increasingly residing in India. GCCs have evolved from cost centres to strategic innovation hubs that contribute directly to global business transformation.
Could you highlight some specific innovations being carried out at GCCs in India currently?
Across various industries, we're witnessing remarkable innovation.
In the automotive sector, substantial intellectual property and patents are being created through GCCs and R&D centres. For instance, Jaguar Land Rover claims that every car is touched by an Indian professional at some point in the manufacturing process, with numerous patents being generated locally.
Technology companies are creating innovations through startup collaborations and independent development. GCCs that initially came to build capabilities are now creating business value propositions.
Solutions developed in India are being commercialised and offered globally because we're executing at scale, creating new markets and revenue streams.
A notable example involves a major retailer where a technology solution developed for their specific needs proved so agile and effective that they monetised the concept, offering it to other retailers in the market.
This demonstrates how GCCs have evolved from being cost items on balance sheets to becoming revenue streams, identifying new revenue opportunities for global operations.
For the 30 Fortune 500 companies operating GCCs in India, what portion of their revenues could be attributed to Indian GCCs?
These 30 GCCs primarily function as capability centres building competencies for global businesses rather than creating markets specifically in India. Even as some GCCs support the Indian market alongside US or UK markets, the direct revenue impact from GCCs creating new revenue streams remains limited.
Currently, only a small percentage of GCCs are actually generating revenue streams -- I'd estimate this is still in single digits.
The primary function remains building capabilities for global operations rather than direct revenue generation, though this is gradually evolving.
Tier-2 cities like Coimbatore, Kochi, Jaipur and Indore are emerging as magnets for new GCC investments. Beyond cost advantages, what makes these locations attractive, and how does talent retention compare with metropolitan areas?
The evolution began when metropolitan cities like Bangalore, Hyderabad, Pune and Gurgaon reached saturation after successfully capitalising on GCC opportunities due to available talent pools.
Recognising this lucrative opportunity for state revenue generation, other state governments developed highly viable and business-friendly GCC policies, offering rebates, refunds, and incentives to attract global companies.
The attractiveness of tier-2 cities is significantly enhanced by government support -- companies wouldn't naturally consider locations like Coimbatore without substantial governmental assistance in establishment.
This governmental support is complemented by educational infrastructure, with numerous colleges being established in tier-2 cities. Previously, graduates from these cities would migrate to metros for employment.
Now, with jobs available locally, there's reduced motivation for talent migration to tier-1 cities, creating more equitable talent distribution.
However, metros continue to dominate in leadership roles due to global exposure and transformational mindset requirements for GCC leadership.
The optimal model appears to be hub-and-spoke, where leadership remains in metros whilst operational teams function in tier-2 cities, combining the cost arbitrage of tier-2 locations with the leadership and talent arbitrage of tier-1 cities.
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