With the emergence of global capability centers (GCCs) playing a critical part in the expansion, according to a global report released on Monday, India's share of global service exports has more than doubled in the previous 18 years.
The expansion of GCCS has boosted real estate, increased service exports, contributed to economic growth, created jobs, and resulted in a quick increase in revenue for these companies. GCCs are specialized offshore corporations established by global companies to assist a variety of business activities such as IT, human resources, finance, and analytics.
“GCC revenues in India have nearly quadrupled over the last 13 years, growing at a 11.4% CAGR to $46 billion in FY23. The number of GCCs has more than doubled from 700 to 1,580 over the same time period, with the sector adding around 1.3 million employees (11.6% CAGR), bringing the total employee headcount to 1.7 million in FY23," according to a Goldman Sachs report titled "India's rise as the world's emerging service factory."
“We anticipate that the robust increase in high-value services will continue in the coming years. According to the survey, the increase in high-value services is expected to stimulate domestic top-end discretionary consumption as well as commercial and residential real estate demand,” the report stated.
It stated that India's services exports increased to almost $340 billion in 2023 at a CAGR of around 11% from 2005 (nearly double global growth), exceeding goods export growth. "As a result, India's share in global services exports rose from under 2% in 2005 to 4.6% in 2023, while India's share in goods exports only increased from 1% in 2005 to 1.8% in 2023," the paper added.
According to the report, computer services would continue to be the largest sub-sector in India's service exports in 2023, accounting for about half. However, professional consulting exports have been the most rapidly developing sector.
