Karnataka’s recent draft policy to double the number of Global Capability Centres (GCCs) by 2029 marks a pivotal moment in India’s evolving role in the global technology and business process outsourcing landscape. Traditionally seen as low-cost back-office hubs, GCCs in India have transformed into crucial components of multinational corporations, driving innovation, research, and operations support. With this new policy, Karnataka aims to position itself at the forefront of this transition, fostering both economic growth and employment opportunities across the state.

The policy’s ambitious goal of reaching 1,000 GCCs by 2029 is not just a numbers game; it represents a broader strategy to reshape Karnataka’s economic and technological landscape. By aiming to create 350,000 new jobs, the state government is signalling its intent to capitalise on India’s strong digital and technical talent pool, while addressing the rising global demand for highly skilled workers. This plan is also supported by economic forecasts suggesting that India’s GCC sector could expand significantly by the end of this decade, employing up to 2.8 million people nationwide. A key strength of the policy is its emphasis on incentives. The offer to reimburse rent, waive patent fees, and exempt companies from electricity duties based on their employee count provides a compelling financial advantage for global corporations. This is especially true in an increasingly competitive global environment where nations and regions vie for investment.

Furthermore, the strategic decision to promote cities beyond Bengaluru, such as Mysuru, Mangaluru and Tumakuru, is essential. It reflects recognition that Bengaluru’s infrastructure is already under strain and that other cities can serve as alternative hubs for development, decentralising growth across the state. The initiative also speaks to the evolving role of GCCs themselves. No longer just outsourcing destinations, these centres have transformed into global engines of research and development, artificial intelligence, finance, and daily operations management. The state’s promise to fund skills courses and offer research grants ~ especially in emerging fields like AI ~ shows an understanding of the need for continuous upskilling and innovation.

This focus on advanced tech and AI is timely, as artificial intelligence will undoubtedly play a major role in shaping the future of businesses across sectors. However, to truly achieve its targets, Karnataka must address several key challenges. One is infrastructure, particularly in secondary cities. While the policy aims to spread the growth beyond Bengaluru, substantial investment will be needed to upgrade facilities and transport networks in cities like Mysuru and Mangaluru to make them attractive to both employees and corporations. Moreover, while the incentives are appealing, global companies will expect a seamless regulatory environment and ease of doing business, both of which will require further reform. The success of this plan will hinge on its ability to improve infrastructure, support innovation, and ensure a business-friendly environment in the years to come.