GCC Setup Cost vs ROI: A Clear Comparison

As of 2024, India hosts over 1,700 GCCs, employing 1.9 million professionals and generating more than $64 billion in annual revenue. Offering talent, infrastructure, and cost reduction across operating expenses, India offers valuable gains to global enterprises looking to cut costs.

However, savings are not the only target for modern GCCs. Many companies leverage GCCs as innovation hubs to develop new products, improve services, and nurture talent. These centers even help generate new revenue streams. By breaking down the investment costs versus the potential benefits of setting up a GCC in India, you can get a clear picture of whether a GCC is a smart choice for your business.

What’s Included in Setup Cost Vs Run-Rate Cost 

Establishing a GCC in India comes down to managing two distinct financial levers. First, the capital injection required, which includes setup expenses. Then, the operational fuel, encompasses the recurring run-rate needed to keep the engine running. Understanding both helps plan a realistic budget and forecast ROI.

Setup Costs: Entity, Facilities/Fitout, Core Tech, Initial Hiring

Key components include: 

• Company registration and legal, tax, and regulatory compliance
• Office space setup, furnishing, and basic infrastructure
• Hardware like laptops, servers, and networking equipment
• Software licenses for productivity, ERP/CRM, developer tools, and security
• Hiring the initial core team of engineers, managers, and operations leads
• Employee onboarding and training
• HR systems for payroll, benefits, and compliance (setup plus ongoing licensing/maintenance)

Run-Rate Costs: Payroll, Tools/Licenses, Real Estate, Compliance

Ongoing costs to sustain operations and deliver ROI include: 

• Salaries and benefits, including health insurance, gratuity, PF, and bonuses
• Attrition-related costs like hiring and training replacements
• Software subscriptions and tools for productivity, analytics, and security
• Recurring rent, utilities, and office operations such as cleaning, security, and transport
• Compliance and regulatory costs, including filings, audits, labor law compliance, and data protection

What are the ROI Categories GCCs Generate Over Time 

Beyond the initial balance sheet benefits, these hubs act as force multipliers. They have the ability to become the primary engine for unlocking new market opportunities, incubating innovation, and fortifying the company’s operational backbone.

Efficiency ROI  

• Labor Arbitrage: Access skilled talent at a lower cost compared to onshore locations
• Team Utilization: Structure teams for maximum productivity and minimal downtime
• Vendor Rationalization: Consolidate services under one center to reduce dependency on multiple external vendors

Effectiveness ROI

• Speed-to-market: Shorten development and deployment cycles
• Quality: Centralized teams and standardized processes ensure consistent high-quality output
• Product Velocity: Continuous innovation pipelines allow faster iterations and feedback

Strategic ROI 

• IP Control: Centralized development protects intellectual property
• Data Residency: Keep data in-country to comply with local regulations
• Resilience: Provide redundancy and business continuity for critical operations
• Proximity to Talent: Access to a local skilled workforce, especially in emerging tech like AI and cloud

Benchmarks And Breakeven Windows Executives Expect 

Understanding GCC costs and returns can help you plan budgets and forecast when the investment will start paying off. 

Cost-To-Serve Bands by Function and City Tier 

Costs vary depending on the type of work handled and the location of the GCC. 

• Technology Roles: Higher cost in Tier-1 cities like Bengaluru or Mumbai; lower in Tier-2 cities
• Operations and Support: Generally lower cost, but influenced by city tier and skill level
• Specialized Roles: AI, cloud, and R&D talent command premium wages even in lower-cost cities 

12–18 Month Breakeven Scenarios by Headcount and Scope

Breakeven for a GCC depends on team size and scope. Smaller, focused teams break even faster, while larger, complex setups take longer. This also hinges on resource efficiency and the speed of value delivery.

Sensitivities: Wage Inflation, Attrition, Incentives, Utilization

Breakeven and ROI for a GCC depend on core operational factors. Rising wages and high turnover can slow returns, while incentives, strong utilization, and higher productivity accelerate value and breakeven.

Incentives and Location Strategy That Reshape TCO 

The GCC’s physical footprint is one of the few variables enterprises can control to protect margins. Aligning the base of operations with favorable government policies creates an immediate advantage in reducing the overall burn rate.

Incentives Stack

Government and local incentives can make a big difference in setup and running costs. Tax credits, rental support, and grants for hiring or training staff can reduce the financial burden and speed up ROI. Companies often combine multiple incentives to get the most benefit.

Tier-1 Vs Tier-2 Trade-offs 

Tier 1 cities offer larger talent pools but come with higher wages and infrastructure costs. Tier 2 locations are more cost efficient but have smaller talent pools and developing infrastructure. Companies balance these factors to choose the best location for their GCC.

5-Year P&L View 

Looking at a longer-term perspective, planning for five years helps manage financial risk. Phasing investments, keeping buffers for unexpected costs, and including exit or flexibility clauses in leases or contracts ensure the GCC can adapt while staying profitable.

Sample 3-Year ROI Narrative Executives Can Trust

This three-year roadmap shows when value starts, scales, and strengthens.

Year 1: Setup, Partial Ramp, and the Start of Cost Offsets

The first year usually focuses on getting the center up and running. There is investment in infrastructure, hiring, and systems. As the team starts taking on work, some cost offsets may appear, though results are often gradual rather than immediate.

Year 2: Scale, Speed, and Breakeven Reached

By the second year, the GCC may scale closer to its intended size. Teams start working more efficiently, and quality and speed metrics may begin to improve. Breakeven is often possible around this time, but it can vary depending on scope, team ramp-up, and operational factors.

Year 3: Expansion, Innovation, and Growth

In the third year, the GCC may take on more strategic or complex work, like: 

• Innovation

• Product development

Savings and efficiency gains from earlier years can provide some flexibility to explore new initiatives. This period often sets the stage for the center to move beyond cost savings toward broader business impact.

Measurement Framework to Maintain Credibility

A simple, transparent system keeps GCC performance reliable and provable.

Cost Model

Costs are tracked by looking at what work is being done and how much it costs. Comparing with benchmarks helps identify areas where spending is higher or lower than expected.

Benefits Model

Benefits are measured by how well the GCC is used and how efficient it is. Tracking metrics such as process speed, project releases, and employee satisfaction helps show progress beyond just costs.

Governance

Good governance makes sure the numbers are trusted. Regular reviews, clear decision-making, and simple escalation rules help keep leadership confident and guide improvements.

Setting up a GCC in India takes investment, but the long-term benefits can be significant. Beyond cost savings, GCCs help companies innovate faster and create new opportunities. ANSR can help make the process easier. Our experienced teams guide companies from setup to operations, helping ensure the GCC delivers real value.