Nano giants: Niche tech firms fuel India’s next GCC wave

According to industry insiders, companies such as M31, d-Matrix, and MemryX, among several others, are increasingly setting up focused ‘nano’ GCCs in India. Michigan-based MemryX and Padova, Italy-based M31 are semiconductor companies working on building intellectual properties (IPs) and computing software. California-based d-Matrix builds computing solutions for its AI (artificial intelligence) models.

The objectives of these companies, which have workforces between 50 and 200 employees, vary. Some want to build niche software products and platforms in India. Others focus on specialized needs for their parent companies. And some others want to test the GCC landscape in the country before eventually scaling up operations.

The companies mentioned above did not respond to Mint’s queries.

“GCCs have now become size-agnostic,” said Lalit Ahuja, founder and chief executive of Bengaluru-based ANSR, which sets up GCCs for companies in India, in a conversation with Mint earlier this month. “The concept of micro and nano (GCCs) started years back and is becoming mainstream in the industry.”

Also read | Tech Mahindra in advanced talks to set up 300-member GCC for Goodyear

Ahuja added that companies can even have one-person GCCs as their size is not important anymore. “I think covid has changed that whole conversation around requirement of size to justify the existence of a GCC,” said Ahuja, adding that there are 200 GCCs in India with less than 100 employees. “We will next year, as an example, do 50 GCCs that will be sub-100 (people).”

While that is a fraction of the overall count of 1,700 GCCs in the country in FY24 that employed more than 1.6 million people, according to data from IT industry association Nasscom, experts believe the trend of nano-GCCs is here to stay and will only accelerate.

“These specialist nano GCCs in sectors such as semiconductors, biotechnology, automotive, telecom and software may not hire in thousands, maybe in dozens or at best a few hundreds, but they focus on high-end tech talent to develop innovative products and platforms,” said Ramkumar Ramamoorthy, partner at Catalincs, a Chennai-based tech advisory firm.

Read this | Budget 2025: Govt. announces ₹15,000 cr fund for stressed housing projects; framework to push GCCs in Tier 2 cities

A third executive said companies were setting up smaller GCCs as a test run. “Customers want to dip their toe in the water when they look to open a nano GCC in India,” said Aveek Mukherjee, chief executive of Gloplax, in a conversation with Mint on 11 March.

“They (companies) look to avoid the high infrastructure costs that come with setting up a GCC and we help them start nano and then become big,” said Mukherjee, adding that Gloplax is running around three such GCCs and is in talks to add more.

The GCC ecosystem

GCCs are in-house technology centres of companies that are traditionally clients of Indian information technology (IT) services firms. Instead of outsourcing their tech work to these software service providers, GCCs hire employees to handle the same work in-house in a comparatively inexpensive location such as India, Vietnam and Mexico.

These captives threaten to eat up the work of pure-play IT service providers as they insource the work that software service providers do for their clients. Still, the country’s top IT service providers also partner with GCCs and help them set up shop. They run these centres initially and then transfer the ownership after some time, which is better known as the build-operate-transfer model.

Also read | Mint Primer: Why Karnataka is placing its bets on a GCC gold rush

The 1,700 GCCs in FY24 is a 32% jump from March 2019, according to Nasscom estimates. These GCCs generated about $64.6 billion in revenue in FY24. To be sure, the country’s IT industry was worth $269 billion the same year.

Most of these GCCs hire a vast array of talent to service parent organisations across IT infrastructure, sales, human resources, and marketing, among others. More than 875 of these back offices are in Bengaluru, whereas Hyderabad has about 355.

Nasscom estimates the number of Indian GCCs to touch 2,200 by March 2030, with a market size of $105 billion. In contrast, Nasscom estimates the country’s IT sector to cross $300 billion in FY26.

And read | Novo Nordisk plans to boost India GCC capacity