Nirmala Sitharaman Proposes GCC Expansion to Tier-2 Cities

Finance Minister Nirmala Sitharaman has signaled a significant shift in India's Global Capability Centre (GCC) strategy, urging companies to move operations beyond traditional metropolitan hubs. During the CII GCC Business Summit, the Minister emphasized that while Bengaluru, Hyderabad, and Gurugram have historically dominated, the next growth phase must leverage the potential of Tier-2 and Tier-3 cities. She explicitly identified locations like Varanasi, Chandigarh, Visakhapatnam, Tiruchirappalli, and Mysuru as viable new engines for innovation-led development in artificial intelligence and engineering.

The shift comes as India’s ecosystem accelerates, with the country now establishing an average of one new GCC per day compared to one per week in 2024. Sitharaman noted that over half of these new facilities are AI-first, signaling a move from basic cost-efficiency to capability-led leadership. At least 10 states are already implementing or developing dedicated policies to support this geographic diversification, supported by central budget initiatives like safe harbour reforms and university-integrated townships.

The government aims to support a target of 5,000 GCCs in India by 2030, reinforcing the nation's goal of becoming a global hub for intellectual property and enterprise innovation. Companies are encouraged to move up the value chain by deepening local partnerships with startups and academic institutions. This initiative is expected to reduce infrastructure pressure on metros while fostering balanced economic development, ensuring India remains a competitive global destination for high-end technology and research capabilities.