India's Global Capability Centers (GCCs) stand on the threshold of a more evolutionary phase beyond outsourcing and back-office work. A new dimension of GCC development is underway in Tier-2 cities, having been formerly largely contained in metropolitan areas such as Bengaluru, Hyderabad, or Pune. Towns including Coimbatore, Bhubaneswar, Indore, and Ahmedabad are now the next growth frontier for GCCs, driven by global business leaders' needs for innovation, agility, and cost-efficiency.

According to industry leaders, these advances are directed by two key forces: the convergence of disruptive technology and the development of high-end outside talent.

With technological capabilities spreading across cities and the workforce becoming digitally savvy in emerging areas like AI, machine learning, and automation, Tier-2 cities are now well-positioned to enable high-end enterprise innovation.

"AI and other advanced technologies are reshaping India’s Global Capability Centers (GCCs) as they evolve from being the outsourcing option of choice into engines of innovation and centers of excellence. This evolution is sustained through deep AI expertise, including generative AI, data science, machine learning, and automation technology, establishing India as a global location for enterprise AI expertise. The key skills required today consist of programming, AI/ML model building, prompt engineering, enterprise capabilities, and data analytics. The specific enabling technologies supporting the GCC potential are generative AI models, cloud modernization, automation tools, devOps and cybersecurity. The GCCs are now taking the lead in AI centers of excellence, bringing faster product design, improved customer experience, and intelligent automation to scale. This new wave of talent and technology positions India’s GCCs to take charge of strategic AI initiatives and intellectual property. At the same time, the high-impact enterprise innovation is elevating India to a globally recognized and India-first power of innovative capabilities within the GCC ecosystem with high value creation and innovation that moved beyond cost arbitrage, explains Kalyan Kolachala, MD, SAIGroup."

"As India’s GCC landscape enters its next transitional step, we see a powerful convergence of talent and technology reshaping global enterprise growth. What began as cost- and process-oriented delivery hubs has already matured into strategic, multifunctional centers of innovation, now driving AI adoption, data-driven decisioning, and end-to-end product development for global organizations, said Saket Newaskar, Director & Head of AI Transformation, Expleo."

"Looking ahead, the new wave of GCC growth will be defined by two interlinked forces. First is the rise of sophisticated talent—engineers, data scientists, domain specialists, and global leaders who can shift from executing tasks to designing strategy and leading P&Ls. India’s ability to produce such talent, across metros and increasingly from Tier-2 and 3 cities, means GCCs can scale deeply and sustainably." Newaskar further added.

The statistics affirm this transformation. India contributes more than 50% of all new GCCs formed globally today, with the industry poised to expand at 11–13% per annum to $100 billion by 2030. The digital-native talent pool, close to 70% below the age of 35, brings a unique edge to driving innovation at scale.

As stated by Aditya Joshi, COO of SA Technologies, "Indian Global Capability Centers (GCCs) are seeing a tremendous shift with the next generation of talent and technology being the genesis of GCC 2.0." Currently, more than 50% of new GCCs emerging worldwide are centered in India, and the ecosystem is expected to expand to reach $100 billion by 2030, growing at an annual rate of 11-13%. GCCs have shifted from cost-effective delivery to strategic innovation centers, leading the charge in AI, cloud, data, and automation. With a digital-savvy workforce where almost 70% of the workforce is under 35 years old, India is leading global transformation. Specialized in GCCs, we perceive GCC 2.0 as the combination of digital capacity and domain excellence, which empowers enterprises to innovate faster, smartly scale, and sustain long-standing leadership."

This transformation is a milestone for India's Tier-2 cities. They are no longer regarded as second-tier places but as strategic players in the international innovation hub. With robust academic networks, increasing digital infrastructure, and government-supported incentives, these cities are providing the perfect setting for GCCs to thrive.

As multinational corporations intensify their digital aspirations, the distributed innovation model driven by Tier-2 hubs will shape the future of India's GCC growth. The combination of local talent with global technology is not only driving operational excellence; it's making India the world's innovation-led GCC leader.