The Hindu Editorial Analysis
22 July 2025
At FTA’s heart, the promise of Global Capacity Centres
(Source – The Hindu, International Edition – Page No. – 8)
Topic : GS 2: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests
Context
The United Kingdom–India Free Trade Agreement could act as a key driver for stronger collaboration in this fast-changing ecosystem.
Introduction
As the UK and India move closer to finalising their landmark Free Trade Agreement (FTA), there is increasing awareness of how this deal could reshape their economic ties. One of the most exciting areas for partnership is the fast-growing space of Global Capability Centres (GCCs) — a field where India is already a global leader, and the UK has strong potential to become a key collaborator.
- India’s GCC Strength: India hosts over 1,500 GCCs, employing more than 1.9 million professionals, playing a vital role in global innovation and digital transformation for multinational corporations.
- UK Firms Shifting View: British companies increasingly see India not merely as a cost-effective back office, but as a strategic hub for R&D, data analytics, cybersecurity, and emerging technologies.
- FTA as Growth Catalyst: The FTA could boost UK-India GCC collaboration by easing regulatory barriers, enabling smoother talent mobility, and aligning digital/data governance standards.
- Global Reach via India: The agreement would allow GCCs to either serve U.K.-headquartered businesses more efficiently or use British expertise to cater to international markets from India.
High-Level Diplomatic Engagement
- Foreign Secretary Visit: David Lammy, the UK’s Foreign Secretary, visited India shortly after assuming office, signalling a strong diplomatic commitment to strengthening bilateral ties.
- Trade Secretary Visit: Jonathan Reynolds, UK’s Business and Trade Secretary, also visited India, setting the stage for the resumption of Free Trade Agreement (FTA) negotiations.
- Prime Ministers’ Meeting: At the 2024 G-20 Summit in Brazil, Prime Ministers Keir Starmer and Narendra Modi had a productive discussion, agreeing to elevate the bilateral relationship further.
Strategic Trade and Investment Goals
- FTA Opportunity for the UK: The FTA offers the UK a strategic pathway to tap into India’s booming digital economy, especially relevant in a post-Brexit global services context.
- India’s Interest in UK Investment: For India, UK collaboration and investment in the Global Capability Centres (GCCs) sector aligns with its goals around digital growth, skilling, and high-value service exports.
- UKIBC’s Vision: The UK India Business Council (UKIBC) believes the future of trade lies beyond goods—focusing on services, skills, and technology, with GCCs at their intersection.
GCCs, Policy Push & FTA Advantages
- FTA Potential for GCCs: The FTA can help enhance cross-border operations, ensure robust IP protection, and promote smart mobility of talent, crucial for expanding GCCs.
- Business Hurdles to Address: A well-structured agreement must tackle double taxation, data localisation mandates, and non-aligned standards—factors that currently inhibit GCC growth.
- India’s Rising GCC Profile: According to Deloitte India, India’s GCCs have become strategic hubs managing global tax, litigation, and compliance operations for multinationals.
- Supportive Policy Environment: Even without a formal national policy, India’s regulatory environment supports GCC expansion. MeitY has set up a panel involving NASSCOM, KPMG, Zinnov, and Invest India to draft a National GCC Framework, as outlined in Budget 2025.
- State-Level GCC Promotion: This new framework will guide Indian states on enhancing talent, infrastructure, legal clarity, and innovation ecosystems to attract more GCCs.
State government policies
| Key parameter | Explanation |
| State-Level Initiatives | Apart from the central government, some State governments are taking big steps. Uttar Pradesh held its first “GCC Conclave” through Invest UP, where leaders from top companies like Microsoft, TCS, HCL, and Standard Chartered joined policymakers. The aim was to show U.P.’s strong infrastructure, incentives, and interest in hosting Global Capability Centres (GCCs) in cities like Lucknow, Varanasi, Kanpur, and Prayagraj — not just in the National Capital Region. |
| UKIBC Consultation | The UK India Business Council (UKIBC) recently hosted a private meeting with key leaders and experts to talk about how GCCs can support innovation and growth in India. They shared ideas and recommendations for improving governance and adopting global best practices to meet India’s economic goals. |
| Key Discussion Points | Topics discussed included: • Whether India needs a national GCC policy now • Whether past organic growth was better without such policies • If multiple State-level policies create competition that may harm national unity • The importance of promoting talent diversity and managing GCC diversity effectively |
| Legal and Market Issues | The group also looked at legal challenges and the market outlook, sharing real-world experiences from both Indian and UK companies. |
| FTA and Diplomacy Impact | The discussions included the effect of India’s economic diplomacy through Free Trade Agreements (FTAs). They explored how the UK-India FTA can help Indian GCCs grow and move up the global value chain, especially by improving professional mobility and talent exchange between the two countries. |
Conclusion
As the two governments work out the final details, business leaders should keep highlighting the value of services, digital trade, and people movement — the key parts of today’s economy. Global Capability Centres (GCCs), especially, can benefit from and support this growing partnership, helping build a strong, knowledge-driven link between the U.K. and India.