The Indian government will assess whether the rapid adoption of artificial intelligence is affecting the pace of expansion of global capability centres (GCCs) in the country, according to Electronics and IT secretary S Krishnan. Speaking at a CII event, Krishnan said it was "time to start measuring the kind of impact that these changes have had and what the outcomes have been since so much was promised as an outcome of some of these changes."
Government's Assessment Plan
Krishnan stated that the government would examine whether the momentum of establishing GCCs had accelerated after recent tax, labour, and regulatory reforms, and whether AI was influencing investment decisions. The reforms were aimed at making India a more attractive destination for multinational companies. The assessment will seek to determine if AI adoption is either accelerating or slowing down GCC growth.
AI's Potential for Higher-Value Work
While the assessment will look at potential drag from AI on GCC expansion, Krishnan struck an optimistic note on India's long-term potential. He argued that AI could ultimately help the country attract higher-value work. "India has the potential of becoming the office space of the world, not just a back office, but actually the way that even front-end operations are run," he said.
Implications for Enterprise Technology Leaders
For CTOs and technology procurement leaders evaluating GCC strategies, this government assessment signals that India is actively studying how AI transforms global service delivery models. The outcome may influence investment decisions in AI-enabled automation, workforce upskilling, and the types of operations that multinationals choose to locate in India. The focus on measuring outcomes from recent reforms also suggests the government is seeking data-driven policy adjustments to maintain India's competitive edge as a GCC destination.
What This Means for the Industry
The assessment will likely examine whether AI is reducing the need for large back-office teams or enabling more complex, high-value centre activities. If AI proves to be a net positive for attracting premium work, as Krishnan suggested, enterprise buyers may see India as a strategic hub for advanced AI operations rather than just cost arbitrage. The government's willingness to measure and adapt its policies could provide a stable environment for long-term GCC investments.
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