Multinationals Consolidate Their Tech Hubs in India

Multinationals are consolidating in India.

And strategically shift from Eastern Europe.

India is the Global Capability Center (GCC) capital of the world, hosting more than 50% of those innovation hubs globally. While Eastern Europe has traditionally served as a strategic location for smaller GCC operations, a notable trend is emerging:

Multinational corporations are increasingly relocating their functions to India or consolidating their operations in their large Indian GCCs entirely.

As the Times of India reported and as I shared in the last issue of India Rising, this is a noticeable shift throughout all sectors, with several major companies leading the trend:

➡️ Financial sector: Deutsche Bank and UBS are relocating key operations to leverage India's deep talent pool in specialised areas like risk modelling.

➡️ Tech: Google, IBM, SAP, Intel expanding their Indian presence, particularly in high-growth areas like AI and product engineering.

➡️ Industrial: ArcelorMittal has joined the trend, recognising India's capabilities in advanced manufacturing support.

➡️ Consumer: Heineken capitalises on India's market proximity and talent advantages.

Two key factors are reasons for this shift: talent availability and cost arbitrage.

Particularly the demand for talent in cutting-edge technology such as AI, cybersecurity, or R&D capabilities leads companies to shift to India, thanks to its large ecosystem and talent base. Deutsche Bank for example decided to move its risk modelling team to India, and SAP is increasing its AI ERP system engineering team in Bengaluru.

With a growing number of AI Centers of Excellence in Indian GCCs as shared by Zinnov, I expect this trend to continue.

Source: Zinnov, Times of India

#India #consolidation #innovation