The In-House Invasion: How GCCs Are Dismantling India’s IT Services Empire 

The rapid rise of Global Capability Centres (GCCs)—offshore units established by multinational companies in India—is systematically disrupting the country’s traditional IT services industry by leveraging its own original playbook: accessing India’s vast, cost-effective talent pool. While overall Indian software exports show strong growth, the revenues of major listed IT firms are lagging significantly, as GCCs, which operate as internal cost centers rather than profit-seeking vendors, capture an increasing share of both business and top-tier engineering talent.

These centers have evolved from handling basic tasks to driving core innovation and digital transformation for their global parents, making them more attractive to job seekers and eating into the market share of IT services giants, who are now forced to rethink their legacy outsourcing model and specialize to survive this fundamental market shift.

The In-House Invasion: How GCCs Are Dismantling India’s IT Services Empire 

For decades, the story of India’s economic rise was synonymous with its IT services titans. Names like Infosys, TCS, and Wipro became global shorthand for outsourcing, leveraging the country’s vast pool of engineering talent to become a $280 billion industry. Their playbook was simple and devastatingly effective: offer world-class technical services at a fraction of the cost. But in a classic case of innovator’s dilemma, the very model they pioneered is now being used against them. The disruptors are becoming the disrupted, and the agents of this change are Global Capability Centres (GCCs). 

The data is stark. While India’s overall software exports grew by a healthy 12.7% in FY25, the revenues of 64 major listed IT services firms crawled forward at just 3.8%. This divergence isn’t a mere statistical anomaly; it’s the sound of the market shifting. The GCC, once a peripheral “cost centre” for multinationals, has matured into a strategic “capability centre,” and in the process, it is systematically eating into the business and talent base of the very IT firms that made its existence possible. 

From Outsourcing Partners to In-House Rivals 

The initial premise was straightforward. If Indian IT firms could provide quality software development and back-office support, why couldn’t a multinational company simply cut out the middleman and set up its own shop in India? Thus, the GCC was born—an offshore unit dedicated to serving the parent company’s global operations. 

For years, this was a peaceful, even complementary, coexistence. GCCs handled foundational IT work, while IT services companies managed complex projects, legacy systems, and provided scalability. But the balance of power has shifted. GCCs are no longer just outposts for routine tasks; they have evolved into hubs of innovation, driving core functions like artificial intelligence, data analytics, and digital transformation for their global parents. 

The reason is twofold: cost and control. While IT services firms must build in a profit margin, a GCC operates as a cost centre, meaning its primary metric is efficiency and value delivered, not profitability. This allows them to offer highly competitive “internal” rates. More importantly, it gives the parent company direct control over its most critical digital assets and the talent building them, a crucial advantage in an era where every company is a tech company. 

The Talent War: A Zero-Sum Game for Skilled Engineers 

The most immediate and visceral impact of the GCC boom is being felt in the battle for human capital. Out of the estimated 200,000 tech roles created in India in FY25, a staggering 120,000—or 60%—were in GCCs. This isn’t just a numbers game; it’s a qualitative shift in the employment landscape. 

The GCC value proposition to an engineer is compelling: 

• Brand Prestige: Working “for” Barclays, Google, or Lloyds on their core global platforms often holds more allure than working “at” an IT services firm on a client project. 

• Meaningful Work: GCCs are increasingly focused on innovation and core product development, moving up the value chain from the maintenance and support work that still constitutes a significant portion of IT services projects. 

• Better Compensation and Culture: Freed from the margin pressures of a services business, GCCs can offer more attractive salaries and often cultivate a product-based work culture that mirrors their global headquarters. 

This has left traditional IT services firms in a bind. As my colleague Debanjali Biswas highlighted in her analysis of Infosys, these giants are now demanding more specialized skills from fresh graduates—in AI, cloud, and data science—while offering stagnant salaries and diminishing job security. The safe, guaranteed career path that millions of engineering graduates once took for granted is now a tough sell against the gleaming offices and global projects of a Goldman Sachs or a Walmart GCC. 

Beyond Tech: The Industry-Agnostic Expansion 

The GCC revolution is no longer confined to the technology sector. This is a critical evolution that underscores the scale of the disruption. The initial wave was led by tech giants who understood the model. The second, more profound wave, is coming from traditional, low-tech industries undergoing digital transformation. 

As the father-son duo behind ANSR, a leading GCC solutions platform, pointed out, companies like JCPenney, Saks Fifth Avenue, and Victoria’s Secret have no intrinsic reason to be in India—except that technology has become the core of their business. A retailer’s competitive edge now lies in its supply chain algorithms, customer data analytics, and e-commerce platforms. By setting up a GCC in India, they can build these capabilities in-house with top-tier talent, bypassing the need to outsource their crown jewels to a third-party IT firm. 

The more traditional the industry, the greater the imperative to digitally reinvent, and the more attractive the GCC model becomes. This expansion opens up a vast new front in the competition for talent, pulling engineers into sectors like banking, retail, and aviation that were never before considered dream destinations. 

The Ripple Effect: Reshaping Banks and Cities 

The GCC phenomenon is creating powerful ripple effects across the Indian economy, most notably in the banking and financial services sector and in the competition between India’s tech hubs. 

Global banks like Lloyds and Barclays have been at the forefront of this shift. Barclays’ India operations now have two-thirds of its tech workforce in-house, a dramatic reversal from a decade ago. This isn’t just about cost; it’s a strategic move to “reclaim” their technology stack. In a digital-first world, the bank that controls its technology controls its destiny. Even Indian lenders like RBL Bank are following suit, rapidly shifting their tech talent ratio from 35:65 in favor of outsourcing to 60:40 in favor of in-house teams. 

Geographically, the GCC boom is fueling intense competition among Indian cities. While Bengalalore and Hyderabad have established themselves as dominant hubs, Chennai is making a concerted pitch to attract these centres. However, as our reporting has shown, it faces a significant hurdle: a shortage of the deep, specialized talent that GCCs now demand. The success of a city is no longer just about infrastructure and tax incentives, but about its ability to cultivate and retain a highly skilled workforce. 

Is This Truly a Zero-Sum Game? 

The narrative of GCCs versus IT services can feel inherently adversarial—a straightforward battle where one’s gain is the other’s loss. But the reality is more nuanced. The Indian IT services industry has faced existential threats before, from the Y2K boom-and-bust to the rise of automation. Each time, it has been forced to recalibrate and evolve. 

The rise of GCCs could be the catalyst that finally pushes the IT services giants to move beyond the legacy outsourcing model. The future for them lies in specializing in areas where they can still provide unique value: managing hyper-scaled, complex multi-vendor environments, offering consulting-led transformational deals, and developing deep, IP-driven solutions in niche areas like AI and cybersecurity. 

The playbook that built India’s IT empire is now being used to build a new one, housed within the GCCs of the world’s largest companies. This isn’t the end of the Indian IT story; it’s the beginning of a more complex, competitive, and mature chapter. The empire is striking back, but from within. The question is no longer if the GCC disruption is real, but how the old guards will reinvent themselves to survive it.