Why nano GCCs are gaining ground by doing cutting-edge work

Dubai-based DAMAC Group, with businesses ranging from fashion and retail to logistics and real estate, opened an operational support centre in Noida, on the outskirts of New Delhi, in November 2025 with 250 employees. DAMAC, which plans to open a second centre in Pune to reinforce its finance, marketing, sales and other functions, followed on the heels of US-based cybersecurity firm Sonatype and security platform Deepwatch. American firms have opened 50-employee offices in Hyderabad and Bengaluru, the original outsourcing capital. These are not the sprawling, multi-thousand-employee, captive global capability centres (GCCs) built by giants such as Microsoft, Google, Goldman Sachs and Amazon in the past two decades with tens of thousands of employees. They are ‘nano’ or even ‘micro’ GCCs—with staff from a few dozen to a few hundred—set up by mid-market enterprises such as DAMAC that see great value in doing so in India: a cost-smart approach with rapid activation and tight control over core work. GCC in a Box Monica Pirgal, CEO, Bhartiya Converge“This marks a new phase in the evolution of GCC models. Enterprises are no longer starting with scale. They are starting with a strategy,” says Monica Pirgal, CEO of Bhartiya Converge. “New approaches like GCC-in-a-Box or GCC-as-a-Service enable companies to establish focused, high-skill centres around artificial intelligence (AI), product engineering and cybersecurity.” Pirgal has held leadership roles at Lowe’s India and Goldman Sachs India. In 2025, she joined Bhartiya Converge, a platform that helps companies set up GCCs. Small GCCs are typically being set up by companies with global revenue of up to $2 billion, says a report by the National Association of Software and Service Companies (NASSCOM) and Zinnov. For them, India offers a 30–50% cost advantage versus comparable talent in the US or Europe. “About 60% of the demand last year was for mid-market GCCs. The GCC model is mature and here to stay. Besides, AI is creating a big push for GCC build-outs,” says Vikram Ahuja, Co-founder and CEO of ANSR, a consultancy that has helped set up more than 200 GCCs. The work these centres handle is very different from the back-office stereotype. Ahuja estimates that 60–70% of new GCC activity is in technology—AI, product engineering and software—while the remaining 30% spans marketing, design, customer success, IT and procurement. That is why companies such as San Francisco-based Meltwater, a global media, social and consumer intelligence firm, are coming to India. In 2025, Meltwater started a 60-people GCC in Hyderabad to do research and development (R&amp;D) work, with plans to grow to 150 engineers by the end of 2026. The Hyderabad GCC is poised to become the company’s emerging AI hub. Among the key innovations developed by the India team are MIRA (Meltwater’s AI team-mate), which uses generative AI to deliver instant insights through a conversational interface, simplifying complex workflows such as brand monitoring and competitive intelligence to meet the demands of 27,000 customers worldwide. The Hyderabad team has also built multilingual named-entity recognition (NER) models that recognise entities within text. The NER models analyse content in more than 200 languages and turn raw data into decision-ready intelligence. “It’s not only about cost arbitrage. The vision is to have a full-scale R&amp;D operation that does product development and product engineering,” says Dhruv Gupta, senior director of engineering and General Manager at Meltwater India. Pirgal of Bhartiya Converge says: “The real advantage for small GCCs comes from achieving the right balance between cost, quality and value. While Tier II cities offer cost advantages, Tier I hubs deliver stronger value realisation via access to talent.” Many of these GCCs are high-skill centres built around AI, product engineering or cybersecurity with modular infrastructure, pre-built processes and shared services. Headcount in India is no longer a symbolic “big bet” but a variable tightly tied to business priorities. For DAMAC Group, India’s appeal lies in marrying talent depth with global ambitions. In November 2025, the company launched DAMAC Shared Services India (DSSI), its GCC, with a multi-phased hiring strategy across Noida and Pune; it is expected to host more than 100 staff by 2026. “Professionals in our India centres bring advanced skills in technology AI and business services. DSSI supports core business functions like finance, operations, sales, marketing, HR, commercial and digital. AI and technology adoption are our key focus areas,” says Rajeev Chaturvedi, vice president—Capability Centre, HR &amp; Operations International, DAMAC Group. “The focus is not on cost arbitrage,” says Chaturvedi. “The real value lies in the exceptional talent pool in India.” Consultants see this shift to small centres play out in mid-market firms across regions. Arindam Sen, Partner and GCC sector leader, technology, media &amp; entertainment and telecommunications, EY India“A compact model provides the flexibility to build high-value, niche capabilities and scale up only when it matters. This avoids the overhead of a large infrastructure-heavy centre,” says Arindam Sen, partner and GCC sector leader, technology, media and entertainment and telecommunications, EY India. Sen describes the economics as “cost-smart, not just low-cost.” Small GCCs save on real estate and operational costs—especially in Tier II cities—while also benefiting from lower Cloud and digital infrastructure costs. “Leaner governance reduces compliance, HR and administrative overheads as well,” adds Sen. The mid-to-small global companies want to transform themselves with AI and, hence, focus on niche or nano centres. They are viewing India as a strategic extension of their innovation and engineering ecosystems. Why Not Outsource? The geographic mix is shifting, too. While US firms still dominate, Europe is surging. According to NASSCOM, more than 45% companies that set up new GCCs in 2024 were from Europe, with Germany accounting for about 28% of that cohort. A Stuttgart-based manufacturing firm, for instance, opened a digital engineering centre in Bengaluru with a 75-member team just 18 months ago. What began as a cautious move has evolved into a long-term innovation partnership, with India driving simulation, automation and AI-enabled operations for plants across continents. Several companies are following a similar script. Deutsche Börse Group, one of the world’s leading stock exchange operators, opened a niche GCC in Hyderabad in August 2025. Independent, family owned German company Festo, specialising in automation technology and technical education, has launched an AI-managed product simulation unit in Bengaluru. Healthcare IT company Netsmart and Deepwatch have both set up centres in Bengaluru, with Deepwatch planning to grow its team to over 100 professionals in 18 months, focused on advanced AI development and platform engineering. Given that these are small, sub-700 people centres, often less than 100 people, collaborating with IT services companies might offer better bang for the buck. Gupta of Meltwater argues that a captive centre offers an edge that outsourcing cannot match. “Our office is a direct extension of our company’s culture and capabilities. We set the bar on the talent we hire. That control is a big advantage, especially when you want to work on cutting-edge technology,” he says. Meltwater hires AI and software engineers from institutes like IIT Hyderabad, BITS, IIIT Hyderabad and IISc Bangalore, among others, and does not partner with IT services providers for its core work. “GCC is like an office anywhere else,” says ANSR’s Ahuja. “If, for instance, an ecommerce company opens an office in London to hire AI engineers, they will do it themselves. They won’t go to an IT services firm and say, ‘please help me hire people in London.’ If you’re an engineer in that market, why work for a third-party when you can work for the product company itself?” Beyond talent branding and training on proprietary technologies, Ahuja points to margins—third-party providers typically add 30–50% mark-up on talent costs—as well as control over proprietary data and IP. Nano Challenges For all the promise of building niche capabilities, nano-GCCs face a few real constraints. EY’s Sen says: “Their key challenges would be leadership depth, brand pull and career pathways. Smaller centres must work harder to attract senior talent, build robust governance and offer clearer growth trajectories.” Chaturvedi of DAMAC adds: “The key challenge is building a cohesive team across multiple locations while maintaining seamless collaboration with our UAE (United Arab Emirates) and international operations.” Despite the challenges, the trend is expected to rise. As AI reshapes industries and digital skills become scarcer in home markets, the ability to build capability with minimal inertia is becoming a competitive advantage. For mid-market firms, a 60- or 250-person GCC in India can be the difference between keeping pace with technology shifts and falling behind larger peers. If the first two decades of India’s GCC growth was written by global giants, the next chapter may well belong to these nano and micro centres. They won’t dominate skylines or campus maps. But in glass towers in Hyderabad, Bengaluru, Pune and Noida, small teams working on AI, product simulations or precision cybersecurity are quietly rewiring how mid-sized companies operate around the world. In the coming years, ‘small’ is likely to be very big: compact, focused GCCs delivering high-value capabilities and cost advantages, not from the periphery, but from the core of global operations—anchored in India.

Why nano GCCs are gaining ground by doing cutting-edge work

India has over 2,000 Global Capability Centres employing nearly two million people. This booming sector has a new kid in town&mdash;smaller units doing cutting-edge work

India has over 2,000 Global Capability Centres employing nearly two million people. This booming sector has a new kid in town—smaller units doing cutting-edge work