Budget 2025: GCCs Want Tax Relief, FDI Easing, SEZ Benefits & Export Incentives

Published Link: BW Businessworld

Currently, India accounts for over 50 per cent of the world’s Global Capability Centres (GCCs), employing approximately 1.9 million professionals and generating nearly USD 65 billion in annual revenue. As the government gears up to present the Union Budget 2025 on 1st February, industry leaders are pushing for bold measures to accelerate GCC growth. 

Tax Incentives to Drive Growth in Emerging Markets

The expansion of GCCs into Tier-2 and Tier-3 cities has been a consistent focus among industry leaders. Rabindra Srikantan, Vice Chairman off CII Karnataka and Managing Director of ASM Technologies, spotlighted the need for tax holidays to incentivise GCC setups in smaller cities. “This will not only improve regional equity but also help tap into untapped talent and reduce operating costs,” he said.

Srikantan also called for rationalising Safe Harbor Rules (SHRs) by lowering margins for IT and IT-enabled Services (ITeS) companies to 14-15 per cent and removing the Rs 200 crore revenue threshold, enabling larger players to benefit. 

India’s GCC (Global Capability Centre) market is projected to expand to USD 99–105 billion by 2030. The number of GCCs is expected to grow to 2,100–2,200, with the workforce increasing to 2.5–2.8 million, as per a Zinnov-Nasscom report

Digital Infrastructure and Policy Alignment

The need for strong digital infrastructure has also been a recurring theme in expert commentary. Alouk Kumar, Founder and CEO at Inductus, pointed out that India lags behind global benchmarks in supporting sophisticated GCC operations at scale. 

He advocated for big investments in advanced digital infrastructure and the development of smart technology parks, drawing inspiration from Malaysia’s Cyberjaya model. “We seek substantial tax benefits and targeted grants to accelerate GCC expansion in domains like artificial intelligence, data analytics, and cloud computing,” Kumar added.

“Drawing inspiration from successful international models like Singapore’s Smart Nation Initiative and Ireland’s Industrial Development Authority, we advocate for dedicated funding streams that can catalyse GCC growth,” says Alouk Kumar, Founder and CEO at Inductus

He also recommended streamlining regulatory frameworks, inspired by Dubai’s Global Free Zones, to simplify compliance processes and reduce administrative burdens. This, he believes, would attract foreign investments and encourage existing GCCs to expand operations. “By aligning tax policies with global best practices while maintaining India’s competitive edge, we can strengthen our position as a premier GCC destination,” Kumar said.

Arun Balasubramanian, Vice President and Managing Director of UiPath India and South Asia said, “Providing export incentives for GCCs will help boost our IT sector, enabling these centres to expand operations and increase their contributions to India’s export revenues,” he said.

Cost Efficiency & Reduced GST on Upskilling and Reskilling

Pinkesh Kotecha, Chairman and Managing Director at Ishan Technologies, addressed the need of simplifying processes for businesses and enabling an environment conducive to innovation. “The budget could promote GCC development by offering incentives and creating a supportive framework that positions India as a hub for high-quality, cost-effective technology solutions,” he said.

To support the growing demand for skilled professionals in emerging technologies, experts have called for a focus on workforce development. Hari Krishnan Nair, Co-founder at Great Learning, said, “Equipping our workforce with cutting-edge skills not only enhances employability but also positions India as a preferred destination for high-value projects,” he said.

Currently, 1,700+ GCCs in India employ 1.9 million talented professionals

Nair urged the government to reduce GST on upskilling and reskilling programmes to make them more accessible. He also proposed including these programmes under educational loan schemes to alleviate financial burdens for learners. 

Plea from the Northeast: A Call for Inclusion

Anjan Pathak, Co-founder and CTO at Vantage Circle, put the spotlight on the immense untapped potential of India’s Northeastern region as a hub for Global Capability Centres (GCCs). Despite its strategic location as the gateway to Southeast Asia, abundant natural resources, and a skilled talent pool, the region has struggled to emerge as an important player in India’s thriving tech ecosystem.

“Global Capability Centres (GCCs) have evolved significantly, becoming key drivers of innovation and technology in India’s thriving tech sector. However, their presence remains predominantly concentrated in Tier 1 and Tier 2 cities like Bangalore, benefiting from well-established tech ecosystems,” Pathak said.

He added that the lack of IT parks, reliable digital infrastructure, and established tech ecosystems in the Northeast India has been a major impediment. According to him, targeted interventions in the Union Budget FY26 could transform the region’s industrial and technological landscape. “As a company headquartered in Assam, and serving global clients like Wipro, Tata Motors, and Infosys, we see vast potential for transformation in the region,” he said.

“The 2025 Union Budget is a crucial opportunity to unlock this potential through targeted tax reforms, including extended SEZ benefits, reduced corporate tax rates for GCCs to 20 per cent for the first 10 years of operation, and GST rebates on tech infrastructure investments,” says Anjan Pathak, Co-founder and CTO at Vantage Circle

Pathak also addressed the potential impact of schemes like the UNNATI Scheme 2024, which focuses on enhancing connectivity and road infrastructure to support tech industries. “Proper implementation of initiatives like the UNNATI Scheme could play a pivotal role in enhancing the industrial ecosystem,” he noted. He also called for introducing grants or low-interest loans to establish IT parks, data centres, and tech incubators, which would create an environment conducive to GCC growth.

Another critical challenge Pathak mentioned was the lack of connectivity in underserved areas. He suggested offering tax benefits or subsidies for companies investing in high-speed internet infrastructure to bridge this gap. “These advancements would not only attract global investments but also drive employment and economic growth, positioning the Northeast as a key player in India’s expanding GCC landscape,” he said.