Why Global Capability Centres Continue to Choose Hyderabad as Their Strategic Base
Understanding the Latest Expansion Trend
Hyderabad has once again emerged as the preferred destination for a new Global Capability Centre (GCC), reinforcing a pattern that has been steadily unfolding over the past decade. While individual company announcements may appear as isolated corporate decisions, together they point to a broader structural shift in how multinational corporations operate and where they choose to anchor their global support functions.
For many readers unfamiliar with the term, a Global Capability Centre—often referred to as a Global In-house Centre (GIC)—is an offshore unit established by a multinational company to manage key business functions. These centres handle operations such as technology development, finance, data analytics, customer support, research and development, cybersecurity, and supply chain management. Rather than outsourcing these services to third-party vendors, companies build and manage their own dedicated teams abroad.
The recent decision by another multinational firm to establish its GCC in Hyderabad is not merely a real estate transaction. It reflects deeper economic trends, policy decisions, workforce dynamics, and global business restructuring.
This article examines why Hyderabad continues to attract these centres, how this trend developed, who benefits from it, and what the long-term implications could be.
What Is Driving the GCC Movement?
From Cost Centres to Strategic Hubs
In the early 2000s, companies primarily established offshore centres to reduce costs. India emerged as a key destination due to lower labour expenses and a large English-speaking workforce.
However, over time, GCCs have evolved from back-office support units into innovation hubs. Today, they are responsible for advanced functions such as artificial intelligence development, cloud engineering, financial modelling, and product design.
Cities like Hyderabad have adapted to this evolution by building infrastructure, talent ecosystems, and regulatory frameworks that support higher-value operations.
How Hyderabad Became a GCC Magnet
The IT Foundation
Hyderabad’s transformation began in the late 1990s when the undivided state government of Andhra Pradesh invested heavily in information technology infrastructure. The development of HITEC City marked a turning point, positioning Hyderabad as an alternative to Bengaluru.
After the formation of in 2014, the new state government doubled down on IT-led growth. Policies were designed to attract foreign investment, simplify approvals, and provide tax incentives.
Over time, several global corporations established large campuses in the city, including: Their presence created a network effect. Once a critical mass of skilled workers and multinational firms was established, other companies found it easier to justify similar investments.
Key Factors Behind Hyderabad’s Appeal
1. Skilled Talent Pool
Hyderabad hosts a dense cluster of engineering colleges, management institutes, and research universities. Each year, thousands of graduates enter the workforce with training in software development, data science, finance, and analytics.
Unlike earlier decades when offshore centres focused on routine tasks, today’s GCCs require advanced skills. Hyderabad’s workforce has matured accordingly.
2. Cost-Quality Balance
While Bengaluru remains India’s most established tech hub, rising operational costs and congestion have encouraged firms to diversify. Hyderabad offers competitive salaries while maintaining comparable technical quality.
3. Infrastructure and Connectivity
The city benefits from:
- A modern international airport
- Expanding metro connectivity
- Planned business districts such as the Financial District and Gachibowli
- The Outer Ring Road network reducing commute times
This physical infrastructure supports the daily functioning of large corporate campuses.
4. Policy Stability
Telangana’s industrial policies, including streamlined single-window clearances, have reduced bureaucratic hurdles. Investors often cite predictability and responsiveness as key advantages.
A Snapshot of India’s GCC Landscape
India is home to more than 1,500 GCCs, employing over 1.5 million professionals. Hyderabad is one of the top three destinations, alongside Bengaluru and Pune.
Below is a simplified comparison of major GCC hubs:
| City | Strength Areas | Cost Level | Infrastructure Growth | Talent Availability | Congestion Level |
|---|---|---|---|---|---|
| Hyderabad | IT, Analytics, Pharma, BFSI | Moderate | Rapidly expanding | High | Moderate |
| Bengaluru | Deep Tech, AI, SaaS | High | Mature but saturated | Very High | High |
| Pune | Automotive, Engineering | Moderate | Steady | High | Moderate |
| Chennai | Manufacturing, IT Services | Moderate | Growing | High | Moderate |
Hyderabad’s balance between cost, infrastructure, and talent has made it particularly attractive for new entrants.
Why Companies Continue to Choose Hyderabad
Strategic Diversification
The COVID-19 pandemic exposed risks associated with concentrating operations in one city or country. Many corporations began diversifying their geographic footprint to build resilience.
Hyderabad, with its established IT base but comparatively lower congestion than Bengaluru, became a logical expansion destination.
Access to Emerging Sectors
The city is not limited to information technology. It has also developed strong pharmaceutical and life sciences clusters. Companies in biotechnology, healthcare analytics, and research see value in proximity to established players.
Support for Innovation
Unlike early-stage offshore centres that focused on support roles, many modern GCCs in Hyderabad are tasked with product development and global strategy execution. This reflects growing trust in Indian teams’ capabilities.
Who Is Affected by This Trend?
Local Workforce
Young graduates and mid-career professionals stand to benefit from expanded employment opportunities. GCCs often provide competitive salaries, global exposure, and structured career progression.
However, the influx of high-paying jobs can also widen income disparities between tech workers and those in informal sectors.
Real Estate Sector
The steady arrival of multinational firms has driven demand for both residential and commercial real estate. Rental prices in areas such as Gachibowli and the Financial District have risen.
Developers have responded with high-rise apartments, gated communities, and premium office spaces.
Urban Infrastructure
Population growth in IT corridors increases pressure on roads, public transport, water supply, and waste management systems. While infrastructure expansion continues, long-term planning will be critical to prevent congestion and strain.
Small Businesses and Services
Local restaurants, retail outlets, transport services, and maintenance providers benefit from the increased corporate presence. The multiplier effect stimulates broader economic activity.
Economic Impact on Telangana
The expansion of GCCs contributes significantly to:
- State GDP growth
- Export earnings
- Income tax contributions
- Skill development
It also enhances Hyderabad’s global reputation as a business-friendly city.
However, dependence on a single sector carries risks. Economic slowdowns in global technology markets can affect hiring and investment patterns.
How This Trend Developed Over Time
Early 2000s: IT Services Expansion
Hyderabad began attracting IT outsourcing firms seeking cost savings.
2010–2015: Emergence of Captive Centres
Multinationals established captive units for finance, HR, and IT support.
Post-2015: High-Value Functions
Advanced analytics, cybersecurity, and cloud operations began shifting to India.
Post-2020: Strategic GCC Growth
Companies started using Hyderabad centres for product engineering, innovation, and global leadership roles.
This progression illustrates how offshore units transitioned from support functions to strategic pillars of multinational corporations.
Risks and Challenges
Urban Saturation
As more companies establish operations, Hyderabad could face challenges similar to Bengaluru, including traffic congestion and rising living costs.
Talent Competition
Intense hiring competition can inflate salaries and increase attrition rates. Smaller firms may struggle to retain employees.
Global Economic Volatility
GCC investments are influenced by global economic conditions. Recessionary pressures in major markets could slow expansion plans.
Regulatory and Policy Shifts
Policy stability has been a strength, but any abrupt regulatory changes could affect investor confidence.
Environmental Considerations
Rapid urban expansion has environmental consequences:
- Increased energy consumption
- Water resource pressure
- Waste generation
- Urban heat island effects
Sustainable planning—including green buildings, efficient transport, and renewable energy adoption—will be essential to balance economic growth with environmental responsibility.
What May Happen Next?
Continued Expansion, With Caution
Industry analysts expect India’s GCC ecosystem to continue growing over the next decade. Hyderabad is likely to remain a key beneficiary, particularly in sectors such as fintech, healthcare technology, and artificial intelligence.
Tier-2 City Development
To avoid concentration risks, companies may also explore secondary cities within Telangana and neighboring states. This could distribute growth more evenly.
Greater Leadership Roles
More senior global leadership roles may shift to India-based executives, reflecting growing trust in local expertise.
Focus on Sustainability
Future projects are expected to incorporate green campus designs, energy efficiency measures, and hybrid work models to reduce environmental impact.
The Bigger Picture
The decision of another multinational corporation to choose Hyderabad for its Global Capability Centre is part of a larger transformation in global business operations.
Hyderabad’s journey from a regional IT destination to a strategic global hub illustrates how infrastructure investment, policy continuity, talent development, and corporate trust converge to shape economic geography.
While opportunities are significant, the city’s long-term success will depend on managing urban growth, maintaining competitiveness, and ensuring inclusive development.
For now, Hyderabad stands as a prominent example of how emerging markets can move beyond outsourcing into innovation and strategic execution. Each new GCC announcement reinforces this trajectory—not as a headline event, but as part of an ongoing structural shift in the global economy.
As companies reassess how and where they operate in a rapidly changing world, Hyderabad’s role appears set to deepen—provided it can balance ambition with sustainability.