GCC ecosystem a powerful leverage for India on global stage

India-US relations show no signs of improvement in recent days even as the punitive 50 per cent tariff on India was kicked in from August 27. Meanwhile, top officials of the Trump administration continue to throw tantrums against India’s purchase of Russian oil. Though New Delhi is conducting backchannel negotiations with Washington for reaching a trade deal, there are no visible signs of any tangible output soon. Rather, things seem to be worsening on the bilateral relationship front. Such is the level of accusations hurled on India that many analysts are now pondering whether the country remains a key partner in the strategic circles of the US. In this context, it is important to understand the strengths and weaknesses of India as a nation.

Moreover, Trump having hit India where it hurts, the Indian vulnerabilities stand exposed. In international relations, leverage counts and negotiations can only be fair when done from a position of strength. Take the example of China. When Trump administration threw tantrums and raised tariffs to astronomical figures, Beijing retaliated in a telling manner by stopping supply of rare earth metal to the US. One must remember that rare earth is a critical mineral used in chip, EV, and other high-value item manufacturing.

As China played its card on rare earth, the Trump administration took a step back and deferred the tariff imposed on China. Now, both countries are negotiating a trade deal anew. Against this backdrop, India must evaluate its strengths before going about to get a fair deal with the US. India has emerged as a major business hub in the services space over the last three decades. Its IT services industry has served enterprises across the world, making a name for themselves. These IT firms have emerged as the flag bearers of India. What started as a cheap labour market for the technology industry, India has come a long way by occupying an envious place as regards innovation and research. Undoubtedly, India has the largest tech talent, skilled in AI, cloud, ML, data analytics and other new technologies. Not only large IT firms, but the country also boasts of the world’s third largest startup ecosystem.

There is another trend, which is worth mentioning in this context. In the last one decade, many global companies have set up their technology centres in India, while most Fortune 500 companies’ critical technology functions are being managed from India. Popularly known as GCCs (Global Capability Centres), India housed around 1,700 GCCs in FY24, generating $64.6 billion in exports. The segment has also emerged as one of the major employers of Indian technology talent by employing over 1.9 million people, as mentioned in the Nasscom-Zinnov report.

According to estimates, the number of GCCs is likely to reach 3,000 by 2030 with cities like Bengaluru, Hyderabad, Pune, Chennai, Noida and many tier-II centres attracting such units. Even mid-level foreign firms are setting up GCCs to leverage Indian technology talent. Such a vibrant GCC ecosystem can be considered as India’s strength in the global geopolitical scene.

With a stable democracy, India is counted as a reliable technology partner for global enterprises. Metaphorically, GCCs are the rare earth theme of India. The world can’t replicate such tech talent at scale anywhere in the world without much disruption. Importantly, the India and US tech ecosystem is deeply intertwined. In this perspective, India should project its strength to get its share of fair treatment from global powers.