Hyderabad is rapidly positioning itself as one of India’s leading centers for artificial intelligence (AI) products and services, according to a new report by the International Labour Organization (ILO). The study highlights the city’s growing role within India’s expanding Global Capability Centre (GCC) ecosystem and the broader digital services economy.
India’s Expanding GCC Landscape
India currently hosts around 1,700 Global Capability Centres, a number projected to rise to 2,550 by 2030. These GCCs play a critical role in delivering digital, technology, and innovation-driven services to global enterprises. Cities such as Hyderabad, Bengaluru, Ahmedabad, and Mumbai have emerged as preferred destinations for GCC establishments due to their talent availability, infrastructure, and policy support.
Hyderabad’s Growing Role in AI and Digital Services
The ILO report identifies Hyderabad as a fast-growing hub for AI-led digital services, contributing significantly to sectoral growth in Telangana. The city’s ecosystem supports advanced capabilities across AI development, analytics, cloud, and enterprise technology solutions, making it attractive for multinational companies setting up GCCs.
Government Support and Policy Initiatives
The Telangana government has implemented several measures to attract and retain GCC investments. These include tax incentives, digital infrastructure development, and rent and maintenance subsidies for new GCCs for up to five years. Additionally, universities in the state are updating curricula to align with GCC hiring needs, ensuring a future-ready workforce.
Digital Services and Global Competitiveness
India’s Digitally Delivered Services (DDS) exports are valued at $269 billion, making the country the fifth-largest globally. Between 2022 and 2024, India’s growth rate in digital services surpassed that of both the United States and China, reinforcing its position as a global digital delivery hub.
Workforce and Demographic Advantage
India’s demographic strength remains a major advantage for GCC growth. The country has 25 million degree-holders aged 25–29, with another 14 million currently pursuing higher education. The report notes that 49% of IT sector employees are young professionals, underlining the availability of scalable talent for GCC operations.
AI, Jobs, and the Future of Work
While the report acknowledges that AI may impact certain entry-level roles, it emphasizes strategic adoption of AI to drive productivity and create higher-value jobs. Encouraging industrial and digital clusters, particularly around GCCs, is seen as key to generating employment and attracting sustained foreign investment.
GCC Growth in Telangana
The number of GCCs in Telangana has grown steadily, increasing from 34 in 2020 to 38 in 2023. This upward trend reflects Hyderabad’s strengthening position as a destination for AI-driven GCCs and global digital operations.
Conclusion
The ILO report reinforces Hyderabad’s emergence as a strategic AI and GCC hub, supported by strong government policy, a skilled workforce, and expanding digital infrastructure. As global companies continue to scale their digital and AI capabilities, Hyderabad and India’s broader GCC ecosystem are set to play an increasingly critical role in the global digital economy.
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