GCC boom will stun everyone; IT sector on slow track, says Raamdeo Agrawal

Market veteran Raamdeo Agrawal said booming Global Capability Centers (GCCs) in India are unlike anything he has seen in his entire life. In an interview with Business Today, Agrawal said the prevailing GCC momentum and the pace at which they are coming up will stun everybody.

"It is a bigger boom than what we have seen ever in life," he told Siddharth Zarabi, Group Editor at Business Today.

Agrawal was sharing his views on the booming Global Capability Centers (GCCs) in India and also on the listed information technology sector as a whole.

Agrawal said IT is an interesting space. He said there is an acute shortage of talented people — young, talented engineers — all over the world. He feels there is no better place than India to come and scout for them.

He cited Covid, saying one thing post the pandemic was clear — that it did not really matter where one works from. He said: "Communication systems — I mean, whether you call from the next room or whether you call from India, it is one and the same thing. The pace of flow of data is also the same. My sense is now the world is going to become flat in terms of talent search, and people will go where the talent is available at a reasonable price."

Agrawal said India's situation today in talent flow is unique. AI-trained young minds are available in India and at a very reasonable price.

As far as the listed services companies are concerned, Agrawal said they are also going through a consolidation phase, redesigning their business models.

"If you look back, whether it is the 2000 discovery of the web, whether it is ERP systems, then the development of the web, then the development of cloud — and now we are talking about the development of AI systems in enterprises. Because enterprises cannot be run without people. AI can, of course, give you productivity gains, but I think you still need a lot of people to run enterprises," Agrawal said.

So IT is still relevant, but there are headwinds in terms of revenue growth. Raamdeo Agrawal said the IT sector accounts for about 14–15 per cent of the economy in India, and that would hold. He said IT would remain on the slow track for some time to come.