AI won’t derail India’s GCC growth but will redefine it, say experts
Experts believe that artificial intelligence will not hinder India's growth in the Gulf Cooperation Council (GCC) region, but rather transform and redefine it. They suggest that AI technologies will revolutionize industries and create new opportunities for economic development in India's relationship with the GCC countries. The experts emphasize the importance of embracing AI to stay competitive in the rapidly evolving global market. They predict that India's collaboration with the GCC will be strengthened through innovative AI solutions.
AI is not a threat to India’s Global Capability Centres (GCCs) but an opportunity to elevate their strategic role, industry leaders argue, countering concerns raised by former RBI governor Raghuram Rajan. While AI-driven automation will impact certain service segments, experts say it will push GCCs up the value chain rather than derail India's growth story.
The Strategic Role of GCCs
“The ‘jugaad’ mindset is a game-changer in AI for India. In a world of unknown unknowns, India thrives by iterating rapidly, anticipating consequences, and course-correcting in real time—turning AI’s uncertainties into opportunities,” Nilesh Thakker, President, Global Engineering at Zinnov, told Moneycontrol. Over the past two decades, these centers have transformed from cost-efficient back-office hubs to innovation powerhouses. The rise of AI is not a vulnerability—it’s an inflection point.
Nonetheless, experts argue that India must overhaul its higher education system to maintain its edge in AI-driven services. Former RBI Governor Raghuram Rajan and Cornell University professor Rohit Lamba argued that India needs to step up its game at a time when AI is accelerating at a breathtaking pace and the entire GCC model may be at risk, they said in a recent Times of India opinion piece.
Evolving with Technology
“The GCC model in India has always been one of evolution and resilience,” said Thakker. Adding that over the past two decades, these captive centres have transformed from cost-efficient back-office hubs to innovation powerhouses. “The rise of AI is not a vulnerability—it’s an inflection point.” While he accepted that AI will automate rule-based and repetitive functions such as software testing, code debugging, and transaction processing in finance, rather than diminishing their role, AI is making GCCs more “strategic” partners for global enterprises.
For context, GCCs in India evolved from cost-saving back offices in the early 2000s to strategic hubs driving innovation and product development for multinational companies. This shift was, in part, a result of India's deep talent pool, digital infrastructure, and the growing mandate for GCCs to lead critical business and technology functions beyond traditional IT and support services.
Growth Opportunities
As it turns out, AI is already being embedded across automation, tech support, service delivery, enterprise decision-making, and product engineering. “We don’t anticipate a slowdown in India’s services export growth—rather, a shift towards AI-driven value creation,” Thakker said, highlighting India’s strong foundation in data and analytics, which is an important value proponent for AI centers of excellence (CoEs) and innovation hubs.
Companies that proactively invest in AI-first capabilities are not just sustaining growth but redefining competitive differentiation. If the GCCs do not keep pace with the changing times, they would lose the edge and therefore it could impact those GCCs which are still doing the basic work.
The Future of GCC Workforce
On the impact of AI automation on India’s mid-level GCC workforce, Thakker believes that workforce roles will evolve rather than disappear. “Employees will use AI to analyze data faster, make better decisions, and manage more complex projects. Critical thinking, creativity, emotional intelligence, and leadership will remain irreplaceable,” he added. Retraining and upskilling will be crucial as AI-driven changes become more pronounced.
There’s a growing demand for AI trainers, AI ethicists, and domain-specific AI specialists within GCCs. Companies investing in AI upskilling and AI CoEs are seeing significant impacts on their operations and bottom line.
Need for Educational Reforms
It is crucial for India to overhaul its higher education system to align with the demands of AI-driven services. Education in AI should be integral to technical skills. An apprentice model where students work on real-world AI projects can bridge the gap between academia and industry expectations.
Investments in R&D
India’s ability to lead in AI also depends on its investment in research and development (R&D). A framework that incentivizes industry-led AI research and supports moonshot AI projects is essential for maintaining a competitive edge in AI technology.
Government initiatives like the National AI Strategy and the IndiaAI Mission are steps in the right direction, but further investments and collaborations are needed to drive AI innovation and excellence.