Cost-saving centres to innovation engines
Over the decades, the story regarding outsourcing in India was guided by one metric; the cost arbitrage. MNCs also turned their gaze to the East in order to reduce the costs of their operations and built back offices that did not require highly skilled employees. Nevertheless, one silent revolution has occurred.
The “Back Office has turned into the Brain Office. Global Capability Centres (GCCs) are being established by the world giants today not only to save money, but also to create value, innovation, and strategic growth.
Through the announcement of the IFSCA (TechFin and Ancillary Services) Regulations, 2025, GIFT City has well established itself as the global hub of such next generation centers.
In particular, the rules are now officially acknowledging and rewarding “Financial Capability Centres” and “Centres of Excellence”, which provides a conducive environment to foreign clients to seek to take their captive offices in the maiden International Financial Services Centre in India.
The Definition of a Modern GCC
Within the new regulatory framework, a GCC in GIFT City is no longer a matter of data entry. The 2025 Regulations, as indicated in the First Schedule, specifically allow the formation of a so-called Financial Capability Centre to offer research and development support services.
It is a game-changer for the world’s banks, insurers and asset managers. It lets them establish a captive unit, which is a Group Entity in the meantime, with the regulations, to service their international activities.
Regardless of whether it is a parent-subsidiary relationship or a joint venture, these entities may now conduct their trade under the offshore jurisdiction of GIFT City whilst remaining geographically based in India.
The “Global Mobility” Advantage
The difficulty of transference of world talent has always been the most important challenge to establishing high-end GCCs.
Innovation is not something that is possible in bubbles; it necessitates the cross-pollination of ideas between the headquarters (e.g. in London or New York) and the capability center in India.
On this understanding, the IFSCA has come up with a particular provision for Global Mobility Services.
This type of Ancillary service is developed to help in the immigration and integration of students and members of foreign countries who would like to work in the IFSC.
In the case of a foreign bank establishing a Financial Capability Centre, it means that you can send senior management to GIFT City with relative ease to educate the local employees, inculcate corporate culture, and manage complicated research and development projects without the bureaucratic nightmare that comes with visa processing.
Tax Efficiency and Currency Freedom
Why do we prefer GIFT City among other technology hubs as Bangalore or Hyderabad? The solution is through the fiscal incentives and the currency regime.
- Currency of Operations: Unlike other areas of India, Gift City GCCs can perform their operations and keep their balance sheets in Specified Foreign Currencies (such as USD, EUR, or GBP). This excludes the currency conversion risks in the parent entity.
- Tax Holiday: GIFT City is entitled to 10 years out of 15 years of tax exemption on all corporate taxes. This has an enormous bottom-line impact of the parent organization.
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Business Definition and Regulatory Basis
| Concept | Description | Regulatory Framework |
|---|---|---|
| Old Model | Back Office (Repetitive Tasks) | Outside IFSC, high-tax |
| New Model | Financial Capability Centre (Brain Office) | Explicitly recognized and incentivized under IFSCA (TechFin and Ancillary Services) Regulations, 2025. |
| Allowed Activity | Providing research and development support services to a captive unit (Group Entity) globally. | First Schedule of the 2025 Regulations |
| Structure | Must be a "Group Entity" (Parent-Subsidiary or Joint Venture) servicing its global operations. | Defined under the 2025 Regulations & Ind-AS standards |
Core Operational Advantages
The primary benefits distinguish GIFT City from traditional Indian tech hubs like Bangalore or Hyderabad:
| Feature | Benefit and Impact |
|---|---|
| Currency Freedom | Operations and balance sheets can be maintained in Specified Foreign Currencies (USD, EUR, GBP). This completely eliminates currency conversion risk for the parent MNC. |
| Tax Efficiency | 100% corporate tax exemption for 10 consecutive years out of a block of 15 years, creating a massive bottom-line impact. |
| Global Mobility | IFSCA offers specific "Global Mobility Services" to support the swift immigration and integration of foreign employees and students. This facilitates the deployment of senior leadership for training, culture, and R&D oversight, removing bureaucratic hurdles. |
| Operational Streamlining | The process is managed via the Single Window IT System (SWIT), reducing operational friction. |
The way Gift City Advisor Supports Your GCC.
The establishment of a GCC requires the struggle with the complicated definitions of Group Entities – making sure that your structure fits the categorisation of parent-subsidiary or associate relationship according to Ind-AS standards.
We are the GiftCityAdvisor that focuses on the organisation of such entities. We assure you that not only will your Financial Capability Centre be in compliance with TechFin and Ancillary Services Regulations, 2025, but also tax efficient. Since the integration of your unit until you get the Certificate of Registration using the Single Window IT System (SWIT), our skilled staff takes care of the whole process.
The Verdict: The days of the bare-bones call centre are ended. The Financial Capability Centre era has come by. Does your organisation have the readiness to make the move?