Regulatory Compliance Key Consideration for GCCs in India

According to a Nasscom-KPMG study unveiled at the technology industry body’s annual GCC Conclave in Bengaluru, global capability centres (GCCs) operating in India face significant challenges in navigating complex regulatory landscapes such as transfer pricing, special economic zone regulations, and labor laws.

Transfer pricing emerged as the top regulatory priority for 81% of GCC executives surveyed, followed by 67% citing SEZ/STPI regulations and 60% highlighting labor laws.

Additionally, corporate tax, DPDPA (Digital Personal Data Protection Act), and FEMA (Foreign Exchange Management Act) ranked among the top 5 regulatory considerations for CXOs surveyed.

The report underscores the critical role of proactive engagement with regulatory frameworks in ensuring sustained success for GCCs and contributing to India’s status as a global business hub.

Moreover, 96% of leaders emphasized the importance of adopting and leveraging emerging technologies for sustained growth, while 72% identified talent management as a key priority.

External considerations regarding emerging technologies include factors related to third-party involvement, regulatory compliance, and cyber threats, while internal factors encompass content quality, data reliability, and governance and ethics.

Furthermore, while 44% of interviewees stressed the need to address concerns around concentration, only 20% perceived the concentration of GCCs in India as a risk.

Srikanth Srinivasan, Vice President at Nasscom, highlighted the constant adaptation of GCCs to the evolving risk landscape, driven by factors like blurring geographic borders and technology disruptions.

As of 2022, India hosted over 1,580 GCCs, employing 16.6 lakh professionals, with projections indicating a rise to 1,900 GCCs and a talent pool exceeding 20 lakh by 2025, according to a report by CBRE.

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