AI Reshapes India's $100 Billion GCC Industry as 18% of Procedural Work Faces Automation

GCCs switching to smart workflows as AI gobbles up procedural grunt work

Industry experts said AI is shrinking junior-level workflows, reducing standalone procedural functions and pushing multinational companies to redesign the kind of work handled by their India centres. Early industry estimates suggest nearly 18% of India's GCC work still sits in commoditised, process-heavy functions that are increasingly being automated, embedded into AI-driven workflows or rebuilt by AI-native firms, marking a structural shift in the country's largest white-collar employment engine. India's nearly $100-billion global capability centre (GCC) industry is at an inflection point where hiring is rising, but "portfolio hollowing" has begun. Artificial intelligence is compressing repetitive functions across customer support, finance, Human Resources, analytics and software operations, even as companies continue to expand and add headcount, experts told ET. Industry experts said AI is shrinking junior-level workflows, reducing standalone procedural functions and pushing multinational companies to redesign the kind of work handled by their India centres. Early industry estimates suggest nearly 18% of India's GCC work still sits in commoditised, process-heavy functions that are increasingly being automated, embedded into AI-driven workflows or rebuilt by AI-native firms, marking a structural shift in the country's largest white-collar employment engine. According to a recent report by global consulting firm Zinnov, nearly 55% of global GCC portfolios are exposed to AI-led disruption, with procedural and commoditised work carrying the highest risk. "Our analysis of 1.7 million-plus job descriptions across 60-plus countries puts India's commodity share at 17.7%, far below competing GCC locations like the Philippines at 40.1% and Costa Rica at 41.1%," said Pari Natarajan, chief executive officer at Zinnov. The hollowing is most visible in finance and HR, where AI has moved from pilot to production. Invoice processing cycle times have fallen from seven days to one day, financial closing process from 12 days to five days, and headcount requirements for these functions by 75%. HR self-service is now resolving 70-80% of queries without human intervention. In software development, output per developer has improved 40-80%. "These aren't pilot numbers, they're production benchmarks," said Vikram Ahuja, co-founder, ANSR, a GCC enabler. The shift is emerging as a critical transition point for India's GCC ecosystem, which has expanded to more than 2,100 centres employing over 2.3 million people. Industry experts said the disruption is showing up less through large-scale layoffs and more through changes in the composition of work itself. Over 70% of GCCs are now explicitly tasked with driving their parent enterprise's global AI mandate, and AI hiring across GCCs has surged 131% year-on-year. Companies setting up new GCCs today are planning for 20-40% fewer employees than they would have three years ago, while expecting more output. Enterprises are increasingly prioritising hiring for AI, data, cybersecurity and product engineering roles, while functions such as marketing operations, customer support, finance processes, procurement, talent sourcing and repetitive analytics face the most exposure to AI-led restructuring. "The signal isn't shrinkage, it's recomposition," said Arindam Sen, partner, EY India. He said companies are moving away from broad-based volume hiring toward specialised, capability-led roles as AI automates routine tasks across finance operations, HR processes and IT support functions. Sen added that operations-heavy work faces direct substitution risk from AI, while engineering-heavy work is seeing augmentation, where productivity per engineer rises and the junior end of the workforce pyramid gets compressed rather than eliminated. "The enterprise priority has clearly moved from how cheaply can this centre run to what can this centre build," he said. Yet the transformation remains uneven. Only 37% of GCCs are running active AI pilots, and 40% of agentic AI projects are projected to be cancelled due to unclear returns and inadequate governance. Gaurav Vasu, founder of UnearthInsight, a market research platform, said there is still limited evidence globally of wholesale elimination of enterprise functions. "AI is changing how work is delivered and improving output efficiency, while selectively reducing highly repetitive layers of work," he said. Vasu added that many enterprises are still evaluating the economics and scalability of large-scale AI deployment, and most core functions across compliance, governance, scientific research and product development continue to require strong human oversight even as procedural workflows gradually shrink. India's structural strengths, including engineering and AI talent at scale and the institutional depth to run enterprise-grade operations, give it a long-term edge. But Ahuja noted that advantage is not guaranteed. "The advantage is structural for those moving up the value hierarchy. It's temporary insulation for those that aren't," he said. GCCs still predominantly running standardised processing, even complex processing, face a different trajectory, he added.

From diapers to drugs: How India's global corporate hubs are putting AI to work

May 28 (Reuters) - Whether they are recruiting the ideal "momfluencer" to sell diapers or trawling through reams of data to fast-track drug launches, global centers of multinational firms in India are increasingly putting AI to work in creative ways. Heads of several Global Capability Centres (GCCs) told Reuters they are deploying AI across a host of functions - from marketing and content creation to finance and human resources - to automate time-consuming, repetitive tasks that once required hours of manual effort. And the ambition doesn't stop there. AI has moved well beyond chatbots and into the corporate engine room - with GCCs leveraging the technology to drive far-reaching innovations. For example, Indian hospital chain Apollo Hospitals has adopted an AI clinical assistant developed with Microsoft that helps doctors gather patient data and generate insights quickly. "That is 20% time given back to doctors. That is 20% time back to patients," said Puneet Chandok, president of Microsoft India and South Asia. Teams at the Bengaluru center of Catalyst Brands, the owner of U.S. department store chain J.C.Penney, are piloting computer-generated imagery to create product visuals and videos. AI could reduce the need to move inventory across the globe for photo shoots, said Nihar Nidhi, India managing director at Catalyst, adding Bengaluru is "at the nose of the rocket" in piloting such prototypes. Huggies diaper maker Kimberly-Clark, too, is using AI to speed up marketing processes, including an internal tool that helps identify and evaluate social media influencers to promote its products and expand reach. DRUGS DATA TO EXPENSE REPORTS Denmark's Novo Nordisk is deploying AI across critical parts of the drug launch process, including drafting regulatory documents, analysing safety data and supporting commercial analytics. That is in line with efforts from drugmakers globally, from Amgen to AstraZeneca, which are deploying AI to identify trial participants more quickly and cut the time needed to produce drug safety reports, potentially saving millions of dollars. At IBM India, engineers have tied up with a top college and local authorities to introduce AI-enabled air-quality monitoring systems. IBM is also working with the government to explore AI adoption and help with upskilling initiatives. Workday India President Sunil Jose said the business software maker was increasingly working alongside global teams to build AI tools for payroll, hiring and finance operations. "For us, it's no more about saying - hey, we're part of that rubric where we'll build a few modules in the Lego module. It's about building the entire model together," Jose said, underscoring the role GCCs play in large corporations' operations. (Reporting by Shivansh Tiwary, Praveen Paramasivam and Aishwarya Venugopal in Bengaluru; Editing by Sweta Singh and Saumyadeb Chakrabarty) By Shivansh Tiwary and Praveen Paramasivam

India's GCC model shifts from cost to capability as AI, talent strains bite

BENGALURU, May 27 (Reuters) - For two decades, India's dominance in global capability centres rested on a simple formula: skilled talent at scale, at low cost. India is now the world's largest GCC hub, with more than 2,100 centres employing 2.36 million people and generating nearly $100 billion in revenue, a 2026 Nasscom-Zinnov report said, adding the "workforce remains India's greatest strength." Executives at the Reuters summit in Bengaluru echoed that view, saying global firms continue to expand in the world's most populous nation because its depth of talent is hard to match. "There are not too many alternatives for companies," said Lalit Ahuja, the CEO of ANSR, which helps global firms build and run GCCs. But the model is shifting. Executives say GCCs are no longer back-office support units but integrated hubs that mirror their parent companies. They manage various functions ranging from technology to product support and analytics to corporate affairs, and are increasingly judged on outcomes rather than cost. At several firms, Indian centres now lead global programmes and handle end-to-end work, from product development to complex commercial and R&D processes. In some cases, work once anchored at headquarters is now owned and executed from India. Microsoft India head Puneet Chandok said the country's edge rests on its massive digital public infrastructure, a talent pool of 27 million developers on GitHub, and policy openness that allows firms to scale quickly. Target operates in Bengaluru as an "integrated headquarters" aligned with its global strategy, while IBM describes its India operations as a "macrocosm" of the enterprise. COST PRESSURES AND TALENT STRAIN As GCCs move up the value chain, rising costs and talent shortages are testing the model. Bengaluru, where most of the GCCs are located, faces civic constraints such as congestion and higher costs, as well as intense competition for talent. Target executive Andrea Zimmerman described the battle for talent as "unreal". Demand for AI and machine learning skills is outstripping supply, fuelling wage inflation. Danish drugmaker Novo Nordisk executive John Dawber said salaries in some tech roles are rising 40% to 50% annually, threatening to erode India's cost advantage. "If costs go out of control, we start to lose one edge of the triangle of your value proposition," he said. Companies are also hedging risk. Kimberly-Clark executive Deena Dayalan pointed to an "India plus" strategy, with firms expanding into Poland, the Philippines, Brazil and Costa Rica. INFLECTION POINT AI is reshaping work, enabling more output without adding headcount and weakening the link between growth and hiring, even as adoption lags behind its rapid advances. "In six to 12 months, we are nearing that inflection point," Ahuja said. Many firms are shifting workers into higher-value roles and investing in re-skilling as hiring slows, though gaps in data, governance, infrastructure and employee readiness continue to delay adoption. For India's GCC sector, this marks a turning point, with AI-first centres accelerating while older ones are forced to adapt. The country's scale remains an advantage, but its edge will hinge on how quickly it adjusts to rising costs, infrastructure constraints and global competition. (Reporting by Chandini Monnappa in Bengaluru; Editing by Dhanya Skariachan and Anil D'Silva)