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Picture Courtesy:  THE HINDU

Context: 

As the United Kingdom and India prepare to sign their Free Trade Agreement (FTA), one of the most promising areas of collaboration is the rapidly evolving ecosystem of Global Capability Centres (GCCs).

GLOBAL CAPABILITY CENTRES (GCCS)

What are Global Capability Centres (GCCs)?

They are Special offices or centers that large international companies set up in other countries.

They handle tasks like advanced research and development (R&D), complex data analysis, cybersecurity, and developing new technologies for their parent companies around the world. 

Why are GCCs so important for India?

Many Centers and Skilled People => India currently hosts over 1,500 GCCs, which employ more than 1.9 million skilled professionals. 

Evolving Role => These centers now drive innovation, create new solutions, and help big companies worldwide manage their digital transformation. 

Economic Contribution => GCCs are a significant part of the services sector, contributing to economic growth, job creation and attracting foreign investment.

How does the UK-India Free Trade Agreement (FTA) help GCCs grow?

Making Rules Simpler => Streamline and reduce complicated rules and procedures.

Easier Movement for Skilled Workers => Helps skilled professionals, like tech experts and engineers, move more easily between the two countries.  

Harmonizing Digital Rules => Align and match digital and data privacy rules between the UK and India, to create a consistent and predictable environment for businesses dealing with lots of data.

How do both the UK and India benefit from this partnership?

UK's Gain => Get better access to India's fast-growing digital economy.  

India's Gain => More investment from the UK and deeper collaboration in the GCC sector.

What is Indian government is doing to support GCCs?

MeitY-led Panel => Ministry of Electronics and Information Technology (MeitY) has set up a special committee to create a detailed national framework for GCCs, as announced in Budget 2025.

State-Level Efforts => Many state governments are introducing their own policies. For example, Uttar Pradesh recently held its first "GCC Conclave" under 'Invest UP' to show off its good infrastructure, attractive incentives, and strong desire to host GCCs.

How do India's GCCs compare globally?

Key Strengths => India's strengths include its vast English-speaking, skilled workforce, cost-effectiveness, robust IT infrastructure, and a strong government focus on digital transformation.

Comparison with Other Hubs

• Philippines => Known for business process outsourcing (BPO) and call centers, but less so for high-end R&D or complex analytics like India's GCCs.
• Eastern Europe (e.g., Poland, Romania) => Emerged as attractive hubs for European companies due to proximity, cultural alignment, and strong engineering talent. However, they have a smaller talent pool compared to India.
• Latin America (e.g., Mexico, Brazil) => Preferred for serving North American markets due to time zone advantages and cultural similarities, but not at India's scale for diverse, high-end GCC operations.

Must Read Articles: 

India-UK Free Trade Agreement 

India-UK FTA 2025: Key Trade Deal 

 Source: THE HINDU