FDI May Be Slowing, But a Surge in GCCs Proves Multinationals Are Still Betting Big on India
When oil giant Chevron monitors its global refinery operations and real-time well data, the eyes watching the screens aren’t just in Texas. They are in Bangalore.
In an era of increasingly complex remote industrial management, the geographic shift of operational control is no longer a surprise. Yet, there is something striking about the reality that during a global energy crisis, the engineers and leaders determining critical energy flows are sitting in southern India.
The Chevron example is a window into a profound structural shift in global business: the rise of the GCC. For years, multinational corporations outsourced basic IT and back-office functions. Today, they are also seeding and building their own captive hubs in India to drive core technological change.
The numbers are staggering. There are now over 2,117 GCCs operating across 3,728 units in India. According to industry body Nasscom, these centres generate roughly $98.4 billion annually, fast approaching the $100 billion mark, which constitutes nearly a third of India’s massive $315 billion software services export market.
More importantly, the nature of the work has moved up the value chain. Of these centres, more than 1,200 possess advanced Artificial Intelligence (AI) and Machine Learning (ML) capabilities, with over 250 operating as dedicated AI/ML centres of excellence. Driven by a 250,000-strong AI workforce, representing 28% of global GCC AI talent and trailing only the United States, India has become the engine room for AI bets.
Executives at companies ranging from British Telecom to fintech giant Fiserv told me last week that some of their global AI initiatives, which could include AI-assisted engineering to complex cloud migrations, are often orchestrated out of Bangalore, Hyderabad, or Pune.
Yet, a glance at traditional macroeconomic indicators paints a seemingly contradictory picture. Net foreign direct investment (FDI) into India has slowed dramatically. A recent report from CareEdge Global Ratings reveals that net FDI inflows fell to historic lows in the 2025-26 fiscal year. In the first 11 months of FY26, net FDI moderated to just $6.3 billion, a sharp plunge from the $35.1 billion average recorded between FY16 and FY20. This decline, driven largely by higher repatriation by foreign investors and increased outward investment by Indian firms, diverges from historical trends where India’s FDI remained relatively stable during periods of global stress.
How do we reconcile plunging FDI with a MNC corporate footprint that is expanding rapidly? Multinationals are setting up new GCCs in India at an average rate of one or more per week. The demand is so high that GCCs have accounted for roughly 40% of all office space leasing in India over the last decade. Furthermore, the boom is no longer confined to traditional hubs like Mumbai, Pune, Chennai, and the National Capital Region (NCR); it is spilling over into emerging centers like Coimbatore, Ahmedabad, Kolkata, Vadodara, and Kochi.
The answer lies in the changing definition of capital. While traditional FDI, measured in physical assets on the ground or direct equity investments, has slowed, investment in human resources is accelerating. A technology services entrepreneur from the UK, who operates offices in Delhi and Coimbatore, told me the immense, untapped potential for mid-sized global companies to establish their own captive centers in India.
Can this rising tide of GCCs and the high-quality employment they generate substitute for traditional FDI? Not entirely. The economic multiplier effects of traditional FDI, such as building an automotive manufacturing plant, are vast and immediate, bringing supply chains, hardware technology, and direct consumer market investments that GCCs do not inherently provide. However, the economic impact of GCCs is compounding in its own right. The real estate footprint is one useful illustration given the jobs and economy impact of real estate expansion. On the other hand, high-end jobs are helping train a generation of Indian professionals to operate at the highest levels of the global ecosystem.
Rather than viewing the FDI slowdown as a strictly bearish signal, perhaps it is better understood as a market evolution. Instead of a single stream of traditional capital inflows, India is evidently cultivating twin streams of investment: one focused on capturing the domestic consumer market, and a rapidly expanding one focused squarely on harnessing its people. For multinational boardrooms, the consensus is clear: you may not be building your next factory in India, but you will almost certainly be building your next algorithm there.
