A supportive and forward-looking regulatory and policy framework via the Budget, will be critical to push the world’s fourth largest economy to consolidate its role as a strategic brain for global enterprises, strengthening the GCC sector’s evolution into delivering capabilities across technology innovation, engineering, research and development, and as global business delivery centres of excellence covering enterprise functions such as IT, finance, human resources, procurement, sourcing, supply chain and customer experience.
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The statistics validate the need for backing this value-creation. India is already home to more than 1,800 GCCs, translating into a sectoral contribution of about $68 billion [close to 1.8% of the Gross Domestic Product (GDP)]. When viewed with the potential of a global demand of about 60% of GCCs exploring organic growth and expansion and new GCC set-ups, by 2030, the direct contribution from GCCs can potentially range between ~$154 bn – ~$199 Bn, with gross employment reach of potentially 20 to 25 million individuals; of this direct employment impact in GCCs ranges from 4 to 5 million individuals, which would almost double the current reach.
The Budget could introduce a concessional tax regime or time-bound incentives linked to employment creation, capital investment and geographic diversification into Tier-II and Tier-III cities. Additionally, enhanced deductions for incremental workforce addition, skilling expenditure and technology investments could materially accelerate GCC expansion.
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Increasing the ease of doing business by introduction of a single window clearance for GCCs and issuing clarifications on PE rules relevant to GCCs, and fast tracking of APAs will provide the much-needed clarity, predictability and certainty. Such focused measures would provide the final push for cementing India’s leadership in the global GCC landscape.
Recognising GCCs as an important economic vehicle for employment, skills and high-value investments, states have moved swiftly to formalise GCC support. Until last year, Karnataka was the only state with a dedicated GCC policy; however, over the past year, several states including Maharashtra, Madhya Pradesh, Uttar Pradesh and Gujarat have introduced GCC-specific frameworks. These policies offer a mix of subsidies in the form of capex, opex and payroll support etc. This momentum was further reinforced by the announcement of a National GCC Policy framework aimed at providing a cohesive and coordinated approach to GCC growth.
The national framework focuses on talent development, ease of doing business, technology-led innovation, expansion into tier-II and tier-III cities, and regulatory certainty, while also envisaging incentives for ecosystem players by including plug and play infrastructure and introduction of Digital Economic Zones. The convergence of national priorities with state-level execution marks a critical inflection point for India’s GCC landscape, positioning the country as a strategic, innovation-led global capability hub.
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In the light of GCCs typically being risk insulated entities serving their group enterprises, the bone of contention is the adequacy of profit margin and its acceptance by the Revenue authorities. To secure certainty here, the prevailing safe harbour scheme would require overhauling to allow for transaction thresholds well upwards of the current ceiling (at INR 300 crore), to enable medium sized, rapidly expanding GCCs to comfortably avail of the scheme. Further, the categories of services would also have to be rationalized along with the markups prescribed – there are currently few takers for Safe harbour for R&D in software development at a markup of 24%. The rules for block assessment are also to be prescribed, such that taxpayers can apply current audit outcomes to two subsequent years, for similar transactions.
A streamlined Indirect Tax compliance framework is as crucial as its legal framework; much has already been done in the past months to further simplify compliance processes. As was expected last year, continued focus on unlocking working capital for input tax credits (e.g. in relation to capital goods) would be a welcome measure.
We expect Union Budget 2026 to act as a catalyst, unlocking the next phase of growth and securing the aspirations and momentum for India’s global GCC leadership.
The author is Partner, Deloitte India