A recent Nasscom-KPMG survey report reveals that global capability centres (GCCs) in India prioritize navigating complex regulatory compliances, especially in the evolving landscape of generative AI (GenAI). The report, “GCCs in India: Building Resilience for Sustainable Growth,” highlights transfer pricing, SEZ (special economic zone) laws, and labour laws as top concerns.

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According to the survey, 81% of respondents identified transfer pricing as the primary regulatory priority for GCCs. Additionally, more than half of the respondents pointed to SEZ laws and STPI regulations (67%) and labour laws (60%) as significant regulatory considerations. Achyuta Ghosh, senior director and head of Insights at Nasscom, noted that while India’s regulatory environment is generally favorable, the complex frameworks and high transfer pricing rates present challenges, indicating a need for improvements.

Ghosh emphasized that GCCs should internally assess the overall regulatory environment, implement checks and balances, and ensure compliance with data privacy certifications. Other top regulatory considerations for GCC CXOs include corporate tax, the Digital Personal Data Protection Act (DPDPA), and the Foreign Exchange Management Act (FEMA).

The report also indicates that adopting emerging technologies is crucial for sustained growth, with 96% of leaders emphasizing its importance. Notably, 70% of CEOs listed GenAI as their top investment priority.

Interestingly, 20% of respondents expressed concerns about concentration risks. However, Ghosh clarified that there is no consensus on the definition of concentration, and it involves more than just headcount. Despite India hosting around 45% of the global GCC workforce, the threshold for concentration varies based on each GCC’s size, scale, and nature of operations.

In summary, the Nasscom-KPMG report underscores the critical need for GCCs in India to prioritize regulatory compliance and technological adoption. As the regulatory and GenAI landscapes evolve, GCCs must adapt to maintain resilience and achieve sustainable growth.