Uttar Pradesh: The Next Global Capability Centre Hub in India....

Uttar Pradesh’s proactive approach toward innovation, along with its emphasis on fiscal and non-fiscal incentives, makes it an attractive destination for multinational corporations looking to expand their global operations. This blog emphasizes the state’s advantages, policy framework, fiscal and non-fiscal support, and implementation strategies.

Introduction

Global Capability Centres have evolved from mere cost-saving back-office units to essential innovation hubs that facilitate product development, artificial intelligence (AI), data analytics, and cybersecurity. India is projected to be a leader in the GCC sector, with an expected market size of approximately $110 billion by 2030. The GCC industry in India employs over 1.9 million professionals as of 2024, accounting for over 1% of the Indian GDP.

Uttar Pradesh is strategically positioned to capitalize on this growth through infrastructure development, talent enhancement, and financial incentives. The state government is promoting Centres of Excellence (CoEs) in emerging fields like AI and cybersecurity.

Advantage Uttar Pradesh: Emerging GCC Destination in India

Sectoral Advantage

GCCs operate across various service lines, including IT services, finance, HR, and customer support. In India, the Software and Technology sectors dominate GCC operations at 38%, with Banking, Financial Services, and Insurance (BFSI) and Telecom & Networking constituting 6% and 5%, respectively. Other major sectors include Transportation, Construction, Electrical & Electronics, Media & Entertainment, & Semiconductors, each comprising 4%. Uttar Pradesh has established itself as a hub for Software and Technology in Gautam Buddha Nagar and is home to over 200 Electronics System Design and Manufacturing (ESDM) and IT companies.

Enabling Infrastructure

Uttar Pradesh has invested Rs 5.31 lakh crore in infrastructure over the past five years, the highest in India. Key projects include major expressways and five international airports. The state boasts over 40 IT parks and 25 Special Economic Zones (SEZs), making Noida a prime location for GCC investments.

The establishment of parks like the Data Centre Park and the Semiconductor Park near Jewar International Airport highlights UP’s growing stature as a tech hub. Additionally, plans for an AI City in Lucknow further solidify the state’s focus on cutting-edge technologies.

Access to Talent

With 56% of its population in the working-age group (18-60 years), Uttar Pradesh has a vast talent pool supported by a strong educational infrastructure. The state produces around 12.75 lakh graduates annually and ranks high in youth employability. Prestigious institutions like IIT Kanpur and IIM Lucknow contribute significantly to this talent pool.

Additionally, Tier-2 cities like Lucknow are becoming hotspots for IT/ITeS firms, providing cost-efficient operations and access to a large talent pool. The state’s educational infrastructure, with over 8,375 higher education institutes, further supports its GCC growth ambitions.

Innovation Ecosystem

GCCs are increasingly investing in startups, contributing to an innovation ecosystem that includes over 15 incubators and more than 40 accelerators in India. Uttar Pradesh ranks fourth in startup concentration (9% of registered Indian Startups) with 13,299 startups, providing GCCs with opportunities to collaborate on innovative solutions.

Favorable Investment Climate

Uttar Pradesh has improved its ease of doing business ranking through reforms in labor regulation and land administration. Initiatives like Nivesh Mitra streamline approvals for investors, while the state government has developed around 27 incentive policies across various sectors. The state also provides comprehensive investor facilitation through its “Nivesh Sarathi” platform, which streamlines communication between investors and the government.

Policy Framework: Accelerating GCC Growth in Uttar Pradesh

Need & Importance

The establishment of GCCs will significantly impact Uttar Pradesh’s economic growth by generating employment in IT services and consulting while promoting regional development. The presence of GCCs will enhance infrastructure development across Tier-I, Tier-II, and Tier-III cities.

Vision

The vision for Uttar Pradesh includes:

1. 1. 1. Establishing itself as a global leader in hosting GCCs.
      2. Transforming into a premier destination for high-value digital services.
      3. Enhancing living standards through improved urban amenities.
      4. Attracting over 1,000 new GCCs to create more than 500,000 job opportunities.

Strategic Objectives

Key strategic objectives include:

• • • Building World-Class Infrastructure: Investments will focus on technology parks and sustainable infrastructure.
    • Hub-Spoke Operating Model: This model aims to integrate various operational aspects to enhance efficiency.

Fiscal Support

The policy outlines various fiscal incentives designed to attract investments into the GCC sector:

• • • Tax Incentives: Provisions for tax holidays and reduced rates for new investments.
    • Subsidies: Financial assistance for establishing CoEs and enhancing R&D capabilities.

Non-Fiscal Support

Non-fiscal measures include:

• • • Skill Development Programs: Initiatives aimed at enhancing workforce skills tailored to GCC needs.
    • Networking Opportunities: Platforms for collaboration between startups and established companies.

Implementation Framework

The implementation framework details how the policy will be executed:

• • • Monitoring Mechanisms: Regular assessments of progress toward achieving strategic objectives.
    • Stakeholder Engagement: Involvement of industry leaders and educational institutions to align efforts with market needs.

In conclusion, with a conducive policy, Uttar Pradesh aims not only to attract investments but also to create a sustainable ecosystem that fosters innovation and enhances the overall economic landscape of the state. By leveraging its strengths in infrastructure, talent availability, and favorable investment climate, Uttar Pradesh is poised to become a significant player in the global GCC landscape.