2 weeks Ago By Moneycontrol
AI is not a threat to India’s Global Capability Centres (GCCs) but an opportunity to elevate their strategic role, industry leaders argue, countering concerns raised by former RBI governor Raghuram Rajan. While AI-driven automation will impact certain service segments, experts say it will push GCCs up the value chain rather than derail India's growth story. “The ‘jugaad’ mindset is a game-changer in AI for India.
In a world of unknown unknowns, India thrives by iterating rapidly, anticipating consequences, and course-correcting in real time—turning AI’s uncertainties into opportunities,” Nilesh Thakker, President, Global Engineering at Zinnov, told Moneycontrol . “Over the past two decades, these centers have transformed from cost-efficient back-office hubs to innovation powerhouses. The rise of AI is not a vulnerability—it’s an inflection point.
” Nonetheless, experts argue that India must overhaul its higher education system to maintain its edge in AI-driven services. Former RBI Governor Raghuram Rajan and Cornell University professor Rohit Lamba argued that India needs to step up its game at a time when AI is accelerating at a breathtaking pace and the entire GCC model may be at risk, they said in a recent Times of India opinion piece. GCCs: Evolving with tech “The GCC model in India has always been one of evolution and resilience,” said Thakker.
Adding that over the past two decades, these captive centres have transformed from cost-efficient back-office hubs to innovation powerhouses. “The rise of AI is not a vulnerability—it’s an inflection point.” While he accepted that AI will automate rule-based and repetitive functions such as software testing, code debugging, and transaction processing in finance, rather than diminishing their role, AI is making GCCs more “strategic” partners for global enterprises.
“As automation takes over routine tasks, GCCs are focusing on AI governance, AI-assisted engineering, and domain-specific AI solutions,” Thakker added. For context, GCCs in India evolved from cost-saving back offices in the early 2000s to strategic hubs driving innovation and product development for multinational companies. This shift was, in part, a result of India's deep talent pool, digital infrastructure, and the growing mandate for GCCs to lead critical business and technology functions beyond traditional IT and support services.
Nevertheless, not everybody is on board. Some say that if the broader agenda is to drive enterprise-wide AI adoption, GCCs will have an impact in terms of the larger roles, such as marketing and customer support. “They are the likely ones which will get impacted with the advent of AI and Gen AI, which also means with the agentic AI workflows, the tendency for the parent organisations and the GCC to get the job done with lesser headcount will become a reality,” 3AI chief executive officer Sameer Dhanrajani told Moneycontrol .
Also read: GCCs outpace IT in 2024; way ahead in job addition, export revenue AI: Growth driver for GCCs? As it turns out, AI is already being embedded across automation, tech support, service delivery, enterprise decision-making, and product engineering. “We don’t anticipate a slowdown in India’s services export growth—rather, a shift towards AI-driven value creation,” Thakker said, highlighting India’s strong foundation in data and analytics, which is an important value proponent for AI centers of excellence (CoEs) and innovation hubs. The catch is that companies that proactively invest in AI-first capabilities are not just sustaining growth but redefining competitive differentiation, experts say.
As is true for any industry, if the GCCs do not keep pace with the changing times, they would lose the edge and therefore it could impact those GCCs which are still doing the basic work. “However, we understand that most GCCs have evolved and are doing work ranging from mid to complex type. I believe that the impact of AI would be nuanced on these - I see it presenting both opportunities and challenges but not a slowdown,” said Gloplax’s co-founder and managing director Aveek Mukherjee.
As far as future job roles are concerned, there’s a growing demand for AI trainers, AI ethicists, and domain-specific AI specialists within GCCs, Mukherjee added. Moreover, companies investing in AI upskilling and AI CoEs are seeing the biggest impact. For instance, Zinnov says a US-based fintech GCC has built an AI CoE, which has delivered over $6 million in cost savings, with an additional $45 million projected over the next five years.
The GCC is focused on end-to-end AI projects, driving Gen AI adoption across cloud platforms, NLP tools, and model management. The future of GCC workforce On the impact of AI automation on India’s mid-level GCC workforce, Thakker believes that workforce roles will evolve rather than disappear. “Employees will use AI to analyse data faster, make better decisions, and manage more complex projects.
Critical thinking, creativity, emotional intelligence, and leadership will remain irreplaceable,” he added. However, retraining and upskilling will be crucial. Dhanrajani estimated that about 30-35 percent of India’s roughly 17 lakh GCC workforce is at the mid-level, which is where AI-driven changes will be most pronounced.
“There will be short- to mid-term job losses due to efficiency gains,” he said, but added that new roles will emerge as AI-driven skills and competencies become the order of the day. Mukherjee echoed the sentiment. GCCs must proactively invest in workforce transformation, he said.
“The ability to reskill at scale will determine how well GCCs navigate this transition,” he said. “The companies that succeed will be the ones that integrate AI alongside human expertise, rather than trying to replace it.” Also, read: 88% of GCC leaders identify learning, development as top priorities in 2025, says survey Need for educational reforms It is common knowledge that educational institutions in India teach outdated syllabus to students.
And to sustain its edge in AI-driven services, India must overhaul its higher education system. “This is one of the most urgent imperatives for India right now,” Thakker said. India’s demographic advantage is a strength, but the country needs a broader focus on creativity, adaptability, and multidisciplinary thinking, experts say, adding AI literacy should be as integral to education as technical skills.
Experts advocate for an apprentice model where students work on real-world AI projects. “Academic institutions must focus on training students for specific AI-related roles in GCCs, including operations, delivery, transition, and knowledge management,” Dhanrajani said. There’s a significant gap between academia and industry expectations, and stronger collaborations can ensure graduates are AI-ready from day one, Mukherjee added.
AI leadership, R&D investments India’s ability to lead in AI also depends on its investment in research and development (R&D), experts weigh in. While Rajan and Lamba highlighted the need for higher R&D investments to maintain India’s competitive edge, Thakker pointed out that most GCCs and IT firms have focused on applying AI rather than driving foundational research. “India needs an R&D framework that provides direct incentives for industry-led AI research and supports moonshot AI projects—not just incremental innovations,” he said, pushing for a DARPA-style model that fast-tracks commercially viable AI research.
DARPA, or the Defense Advanced Research Projects Agency, is a US Department of Defense agency focused on developing emerging technologies for military applications, often with civilian applications. Government initiatives like the National AI Strategy, IndiaAI Mission, and the Rs 20,000 crore allocation for private-sector R&D are steps in the right direction, but gaps remain. Also read: Smaller GCCs outsource non-core work, double down on core products.
