Sanjay Kaul, Group CEO and Managing Director of GIFT City, on Thursday, 9 July said the next generation of global capability centres (GCCs) in India will be shaped by the strength of the ecosystems they operate within — not merely by location advantages or fiscal incentives. Kaul was speaking at the National CII GCC Business Summit in New Delhi, organised by the Confederation of Indian Industry (CII) during its second edition.

Ecosystem Over Incentives

Addressing the session titled 'The Evolving GCC Ecosystem: Key Insights', Kaul argued that future GCCs will gravitate toward destinations offering integrated, interconnected capabilities rather than standalone tax breaks or cost advantages. 'The next generation of GCCs would not be driven purely by locational factors or by incentives but by an ecosystem. They will look for a strong ecosystem where one system feeds another; it is a whole continuum,' he said.

Kaul cited GIFT City as a working model of this integrated approach, pointing to its regulatory framework, digital infrastructure, and innovation-enabling environment as the kind of ecosystem GCCs increasingly require.

AI Reshaping Infrastructure Priorities

The rapid adoption of artificial intelligence (AI) across industries, Kaul noted, has elevated the importance of robust digital connectivity and innovation-friendly regulation. 'With AI entering all spheres of industry, we need a robust ecosystem supported by strong connectivity and digital infrastructure. We also need an ecosystem where innovation can thrive, backed by a regulatory framework that facilitates it. We have it in GIFT City,' he said.

This positions AI not merely as a tool GCCs deploy, but as a structural force reshaping which geographies and infrastructure environments are viable for next-generation global operations.

India's Shift from Cost to Capability to Control

The broader session examined India's evolution as the world's leading GCC destination. Speakers observed that India has moved well beyond cost arbitrage — the original draw for most multinationals — into what they described as 'capability arbitrage', and is now entering an era of 'control arbitrage', where global enterprises are entrusting Indian GCCs with strategic decision-making and enterprise-wide transformation mandates.

Kaul reinforced this trajectory, noting that while GCCs initially came to India for its large talent pool, they are now attracted by the country's expanding capabilities and the broader innovation ecosystem, making India an increasingly compelling destination for global enterprises seeking more than back-office efficiency.

What GCCs Are Prioritising Now

According to Kaul, companies are increasingly evaluating locations on a composite scorecard: quality infrastructure, digital connectivity, predictable regulations, high standards of living, and genuine opportunities for innovation — rather than isolated incentives. This shift has significant implications for how Indian states and special economic zones position themselves in the global competition for GCC investment.

As India's GCC count continues to grow, the contest between ecosystems — not just cities — is expected to intensify, with integrated hubs like GIFT City potentially setting the benchmark for what the next generation of centres will demand.