Karnataka’s New GCC Strategy: Forget Fresh Centres, Scale Existing Ones

India’s global capability centre (GCC) ecosystem is now finding itself in the midst of a visible shift in new investment flows as many states seek a share of the growing pie. However, that also raises concerns over whether Bengaluru—long considered the undisputed GCC capital—is beginning to lose its incremental dominance to emerging hubs like Hyderabad.

Meanwhile, Xpheno’s latest workforce research report, “Telangana: The Next-Gen GCC Powerhouse,” states that Hyderabad now hosts approximately 20% of India’s GCCs and captures a disproportionate share of new greenfield investments.

The city accounted for 40% of all new GCCs set up in India over the past three years, compared to Bengaluru’s 33% share. Of the 164 new GCCs established in the last 30 months, 64 chose Hyderabad, signalling a clear shift in enterprise preference.

While Bengaluru still leads India with over 860 GCCs and more than 7.4 lakh employees, industry insiders note that its advantage is increasingly concentrated in legacy depth rather than fresh expansion momentum. Rising operational costs, infrastructure constraints, and talent saturation are now beginning to influence location decisions for new entrants. 

This competitive pressure might have triggered a strategic response in Karnataka’s policy and ecosystem approach. 

Recently, the Karnataka Digital Economy Mission (KDEM) signed a Memorandum of Understanding with Zyoin Group to strengthen the state’s GCC ecosystem through talent intelligence, ecosystem partnerships, and structured support for operational scalability. 

The partnership hints that Karnataka can no longer rely solely on its legacy advantage and must actively defend its position in an increasingly competitive national GCC landscape.

The Partnership

The KDEM-Zyoin Group partnership is focused on Karnataka’s overall GCC ecosystem, which includes emerging tech clusters of Mysuru, Mangaluru, Hubballi-Dharwad-Belagavi, and Kalaburgi. As per the government, this collaboration aims to enhance operational readiness, talent intelligence, and ecosystem integration for GCCs operating in Karnataka.

“The larger goal is to help Karnataka's GCC ecosystem become stronger, more connected, and future-ready. While supporting prospective GCCs is part of the agenda, our primary focus is on helping existing GCCs scale faster, innovate more, and access the right talent, innovation ecosystem, and industry networks needed for long-term growth,” Sanjeev Kumar Gupta, CEO, KDEM tells AIM.

He adds that Zyoin, an AI-augmented talent advisory and recruitment firm, has helped build a strong GCC ecosystem over the years through initiatives such as leadership roundtables, innovation summits, and talent-focused reports, while working closely with KDEM to strengthen industry-wide collaboration.

The partnership also aims to address a key challenge facing the ecosystem—expansion beyond Bengaluru. Tier-2 cities such as Mysuru and Mangaluru are still evolving in terms of leadership and specialised talent availability.

Anuj Agrawal, Founder and CEO, Zyoin Group, believes that this remains a maturity challenge rather than a structural limitation. “These ecosystems are still evolving. Many of these cities currently lack senior leadership talent and highly specialised talent because they do not yet have mature startup ecosystems.”

He adds that GCC expansion decisions are increasingly data-driven, with companies prioritising cities like Hyderabad, Pune, and Chennai due to deeper leadership pipelines and established ecosystems.

On the question of Bengaluru’s position amid rising competition from other GCC hubs, Agrawal rejects the notion of decline. “I don’t see this as Bengaluru losing to Hyderabad. India's GCC ecosystem is growing rapidly, and multiple cities are benefiting from that growth,” he asserts.

Partnership Framework

The partnership framework is designed to be collaborative rather than advisory, enabling real-time exchange of insights between industry and policymakers.

“We work at arm’s length while supporting each other. If Zyoin engages with GCCs that are exploring India, we can connect them with KDEM and help them understand the ecosystem. Similarly, if KDEM requires talent intelligence, market insights, talent reports, or skill-gap analysis, we can support them with that information,” Agrawal explains.

The partnership also focuses on identifying talent gaps, enabling ecosystem intelligence, and guiding long-term workforce planning for GCCs. While Zyoin is not directly involved in upskilling, it provides critical data on skill availability and emerging gaps to support strategic decisions.

Agrawal notes that infrastructure remains an important challenge for Bengaluru but not a deterrent. “Bengaluru has experienced tremendous growth and, naturally, infrastructure challenges have emerged. However, these are long-term issues that cannot be solved overnight,” he says.

He adds that Karnataka’s core competitive advantage lies in its talent ecosystem, particularly in product development, engineering, and AI-driven capabilities. He emphasises that talent remains the primary driver of GCC investments in India, with infrastructure playing a supporting role.

The collaboration also recognises the growing multi-city GCC strategy, where organisations distribute capabilities across locations based on strengths.

“Many GCCs operate from multiple locations because each city offers unique strengths. Hyderabad has its strengths, Bengaluru has its strengths, and so do other cities,” he states.

Gupta believes that the bigger opportunity today is not just attracting new GCCs but helping existing GCCs expand their mandates, build higher-value capabilities, and create greater strategic impact from Karnataka.