India’s outsourcing expands with AI and GCC-led innovation: BCG chief

MUMBAI, INDIA — India’s outsourcing industry is expected to continue expanding even as artificial intelligence (AI) transforms global business operations, according to Christoph Schweizer, CEO of Boston Consulting Group (BCG). 

In an interview with The Economic Times, Schweizer said that instead of displacing outsourced work, AI is helping to accelerate the rise of Global Capability Centers (GCCs) in India, adding a new layer of growth driven by high-value digital and innovation capabilities.

India strengthens position in global AI race

Schweizer said India remains well placed in the global AI race due to its talent base, digital infrastructure progress, and pro-innovation policy environment. 

While the United States and China lead the field, India belongs to a group of “emerging AI middle powers” that are rapidly scaling investment and capability. 

“Among the emerging AI middle powers, Japan and Korea draw on their hardware and deep tech strengths, while Saudi Arabia and the UAE channel vast capital into data [centers] and upskilling. India belongs in this group and brings real advantages,” Schweizer told The Economic Times.

He emphasized that India’s strength comes from skilled, scalable talent, fast-moving, adaptable entrepreneurs, and the rollout of targeted incentive schemes and supportive programs by the present government. 

These conditions, he added, give India momentum to become a global hub for AI and digital innovation.

GCCs drive next wave of tech-led outsourcing growth

Contrary to the perception that AI may reduce demand for outsourced IT services, Schweizer said the outsourcing sector will continue to expand. 

“Our view is that the IT outsourcing market will continue to grow,” he said. 

However, the nature of growth is shifting. Increasingly, multinational companies are establishing GCCs in India to build advanced digital and AI capabilities internally.

“Global companies are setting up advanced [centers] in India, many focused on AI. What began as a cost play has become a capability play, driven by exceptional and differentiated talent,” Schweizer said. 

“The GCC space is adding a powerful new layer of growth and long-term strength to India’s technology ecosystem,” he added.

The consulting sector itself is undergoing a transformation as AI assumes tasks traditionally performed by analysts and researchers. Yet BCG views this change as an opportunity. 

The firm has “reshaped its talent mix” and now employs around 3,000 specialists in its AI-focused unit, BCG X.

Shift from cost-efficient outsourcing to value creation

The emerging trend indicates a shift from volume-based outsourcing to value-driven capability development. For markets with strong IT sectors, such as India and the Philippines, the challenge and opportunity lie in transitioning to higher-skilled roles in data, research, analytics, and AI oversight. 

Rather than diminishing outsourcing, AI is elevating it—rewarding ecosystems that can supply adaptable talent and innovation capacity.