To set up a global capability center (GCC) in India, first define the work and decision-making authority it will own; then choose an operating structure, confirm foreign-investment rules for its actual activities, select a location, and plan for any SEZ application, tax treatment, staffing, and ongoing governance. A GCC is an operating model—not a single Indian legal form or a one-size-fits-all registration process.
India’s GCC ecosystem is substantial: India Briefing reported, attributing the figures to government sources, over 1,700 GCCs, about 1.9 million professionals, and US$64.6 billion in revenue as of FY 2023–24. Those figures describe the market, not the likely size or performance of an individual company’s center.
1. Define what the India center will own
Start with the mandate, not a city shortlist or incorporation form. Decide whether the center will deliver defined services to the parent and affiliates, or will also own decisions, products, or capabilities that shape global operations. India’s Press Information Bureau (PIB) describes GCC work spanning IT, research and development, customer support, and other operations; India Briefing’s June 10, 2026 guide also identifies functions such as engineering, finance, data, and customer operations.
Write down the intended service boundary before comparing structures. Include:
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- The activities and outputs the India team will be accountable for.
- Which decisions stay with the parent and which the India leadership can make.
- Which group companies will receive services and how they will request or assess them.
- The systems, data, intellectual property, and other assets the work requires, including how they will move between group entities.
- The expected evolution of the mandate, such as moving from service delivery into engineering, research, or broader operational ownership.
This definition will inform the activity and investment analysis, hiring plan, intercompany agreements, and controls. It also helps prevent a mismatch between the center’s formal service description and what its teams actually do.
2. Compare operating structures and check foreign-investment rules
The label “GCC” does not prescribe a legal entity type. Before selecting a structure, compare the intended ownership and control, activities, funding, risk allocation, governance requirements, and ongoing obligations with qualified Indian legal and tax advisers. The right arrangement depends on the company’s facts; the sources cited here do not establish one form as right for every GCC.
Assess foreign-investment eligibility against the center’s actual activities and ownership—not simply the “GCC” label. The Reserve Bank of India’s Master Direction – Foreign Investment in India, displayed as updated January 20, 2025, says up to 100% foreign investment is permitted under the automatic route for activities not listed in Schedule I and not prohibited, subject to applicable laws, rules, regulations, security conditions, and other requirements. Activities listed in the schedule may have sector-specific caps or approval conditions; the direction also provides additional treatment for financial services.
Use the RBI direction and applicable sector rules to classify the proposed activities and verify the current requirements at the time of investment. The general automatic-route rule is not a blanket determination for every activity a GCC might perform.
3. Choose a location against the mandate
PIB names Bengaluru, Hyderabad, Pune, Chennai, Mumbai, and the National Capital Region as major GCC clusters. Treat these as locations to assess, not as a ranking. The sources do not provide comparable, current city-by-city cost data or establish one city as best for every center.
Compare candidate locations against the roles and operating model you defined. Evaluate the relevant hiring pool, industry connections, access to leadership and group stakeholders, office availability, infrastructure, and resilience. A center recruiting specialist engineering teams may weigh those factors differently from one focused on finance operations or customer support.
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Use consistent criteria when comparing sites, and document why the selected location supports the mandate. If more than one city remains viable, compare actual recruiting and workspace options for the roles and scale you expect rather than relying on a general city reputation.
4. Decide whether to apply for an SEZ unit
A Special Economic Zone (SEZ) may be relevant to a center serving overseas entities, but eligibility and operating conditions need to be verified for the specific activity and zone. Distinguish an application to establish an SEZ from an application to operate a unit inside an existing SEZ: they are different procedures.
| Question | SEZ-level proposal | Unit in an existing SEZ |
|---|---|---|
| What is being proposed? | Setting up the SEZ itself. | Setting up a company’s unit within an existing SEZ. |
| Procedure described by the cited government page | The Department of Commerce’s “How to Apply: Special Economic Zones in India” page describes a Form A proposal to the State Government and Board of Approval. | Falta Special Economic Zone’s “Procedure to Set Up a Unit” page describes a Form F application to the SEZ’s Development Commissioner, with a copy to the developer. |
| Examples of materials identified | The Department of Commerce page describes requirements for the zone-level proposal. | The Falta page includes incorporation documents and a project report among the materials it describes. |
The Falta page was displayed as last updated August 11, 2026. It is a zone-specific procedural reference, not proof that every SEZ uses an identical process or document list. If you plan to enter an existing zone, confirm its current unit-level requirements, the activity’s eligibility, and applicable operating conditions with the relevant zone and advisers.
5. Document intercompany services and transfer pricing
When the India entity transacts internationally with associated enterprises, assess transfer-pricing requirements as part of the operating model. The Income Tax Department’s “Transfer Pricing” guidance says the provisions apply where an assessee has an international transaction with an associated enterprise, or a transaction involving a person in a notified jurisdictional area. The precise treatment depends on the transaction and the rules for the relevant period.
Work with qualified tax support to document the facts that shape the arrangement:
- Functions performed by the India entity and the group companies it serves.
- Assets used, including relevant systems and intellectual property.
- Risks each entity actually assumes.
- The contractual service scope and recipients.
- The pricing approach and required records for the relevant tax year.
Do not assume that one margin or safe-harbour result applies to all GCCs. The appropriate analysis depends on the actual functions, assets, risks, agreements, transactions, and applicable tax-year rules.
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6. Build the people, governance, and compliance plan
Translate the mandate into hiring priorities, leadership responsibilities, service controls, and the way the center will work with the parent and other affiliates. PIB’s December 11, 2025 backgrounder describes a shift into engineering R&D, including aerospace, defence, semiconductors, and advanced manufacturing, as well as broader digital and operational capabilities. That context can help frame the range of possible mandates, but it does not determine which capabilities your company should build.
Assign responsibility for the center’s service quality, hiring, budgets, systems access, data handling, intellectual property, and escalation paths. Then have appropriately qualified advisers identify the local employment, payroll, data, corporate, tax, and other obligations applicable to the activities and location. The sources cited here flag compliance, talent, and governance as continuing setup considerations; they are not a complete compliance checklist.
7. Use a decision checklist before committing
- Mandate: Are the work scope, decision rights, recipients, and ownership of outputs clear?
- Structure and investment: Have advisers assessed the intended ownership and actual activities against current foreign-investment rules and any applicable conditions?
- Location: Does the selected city support the roles, operating needs, and scale in the plan?
- SEZ: If pursuing a unit in an existing zone, have you confirmed the unit-level process and the activity’s eligibility and conditions with that zone?
- Intercompany model: Are service agreements, functions, assets, risks, pricing, and documentation aligned with the work the entity will actually perform?
- Readiness: Are leadership, hiring, controls, and continuing compliance responsibilities assigned?
The sources cited here do not establish a universal legal form, best city, setup budget, launch timeline, or tax result. Those are company-specific decisions to determine from the planned activities, location, transaction structure, and current rules.
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