Global firms expand India tech centers to outsource less
BENGALURU, INDIA — Global enterprises are rapidly expanding their technology centers in India to insource more technology development rather than outsourcing to third-party IT services firms.
According to industry experts, this trend is being led by companies in manufacturing and banking, financial services, and insurance (BFSI).
BFSI clients perform about 65% of technology work in-house and outsource the remaining 35% to IT companies. However, insourcing is expected to rise to 75% in the coming years as global firms aim to retain control over emerging technologies like AI, data analytics, and cloud.
The number of global capability centers (GCCs) in India focusing on research, engineering, and pro duct development has grown from just over 1,000 five years ago to 1,580 by the end of 2023. Global consultancy firm EY forecasted that the country will host 2,000 such centers in the near future.
This year, hiring among GCCs has outpaced IT services companies and startups as global firms expand their technology teams in India.
HR experts added that the rise of GCCs as incubators presented a lucrative opportunity for Indian tech talent. With leading multinationals investing heavily to build out their R&D and engineering centers across India’s top metros and emerging Tier-2 cities, skilled technology professionals have more career options than ever before.
However, Pareekh Jain of Pareekh Consulting said that while insourcing critical technologies may reduce outsourcing revenues for Indian IT vendors, third-party providers will continue to be entrusted with new and emerging technology projects that require specialized skills and resources.
