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Beyond the Back Office

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There was a time when multinational companies came to India largely for support work. Global firms set up offices in cities like Bengaluru and Hyderabad to handle technology maintenance, accounting processes, customer support and back-end operations. They saw India as a destination that offered scale, English-speaking talent and cheaper labour.

That image still exists, but it no longer fully explains what many of these multinational offices in India do.

A new report released this week by IT industry body NASSCOM⁠ and consulting firm Zinnov⁠ suggests India’s Global Capability Centre (GCC) ecosystem is moving into a different phase. India now hosts 2,117 GCCs with 3,728 units, employing 2.36 million people and generating over $98 billion in revenue that could cross $105 billion in 2026.

The more important shift is not the scale but the nature of the work itself.

According to the report, GCCs are increasingly handling functions tied to engineering, AI, product development, cybersecurity, cloud infrastructure and enterprise operations. More than 1,200 centres now have AI and machine learning capabilities. In several cases, these centres are no longer operating simply as offshore extensions, but as integrated parts of how global companies build products, manage systems and deploy technology.

That marks an important change in India’s role within the global corporate structure.

For years, India’s technology story was built around cost arbitrage. Companies outsourced work because it was cheaper to do it here. That advantage still matters. But global firms now appear to be using India differently—less as a low-cost support base and more as a location for specialised capability and operational depth.

The timing of this transition matters because global companies are simultaneously dealing with slower growth, cost pressure and rapid advances in AI. Normally, this would raise concerns about employment in traditional outsourcing and services businesses. The report doesn’t dismiss those concerns. AI is reshaping hiring patterns, productivity expectations and workforce structures inside GCCs. Some functions may require fewer people, while demand rises for specialised skills in data, automation, AI and engineering. Skill cycles are also shortening, making continuous retraining critical.

On one hand, AI may reduce the need for parts of the traditional services model that helped India’s outsourcing sector expand over the past two decades. On the other, the same technology appears to be increasing the strategic importance of centres that can support AI deployment, enterprise transformation and digital infrastructure at scale.

What we can see happening in India is a quiet repositioning. GCCs are evolving even as the older outsourcing model beneath them comes under pressure.

The broader economic implications are difficult to ignore. These centres influence high-skilled employment, office demand, urban consumption and technology ecosystems across major cities. The report notes that India added 110 new GCCs in 2025 alone, including centres focused specifically on AI-led operations.

But there are limits to how far the momentum can sustain. The ecosystem remains concentrated in a handful of urban clusters, most demand still depends on global corporate spending cycles, and the long-term impact of AI on jobs remains uncertain. That uncertainty matters because the sector operates at a scale large enough to affect the broader economy.

For now, though, the direction is becoming clearer. India’s GCC story is no longer only about outsourcing work more cheaply. Increasingly, it is about becoming embedded in how global companies organise technology, operations and decision-making. That is a different kind of integration, whose implications may only become fully visible over time.

 

 

When Scale Isn’t Enough

 

From technology, let’s move to another global business shaped by scale, audiences and economics: sport.

With barely weeks left before the 2026 FIFA World Cup begins, the sport’s global governing body is still without a confirmed broadcast deal in either India or China—two of the world’s largest media markets. 

In India, the Reliance-Disney joint venture has offered around $20 million for media rights. FIFA has reportedly rejected this offer as it is far below the roughly $100 million it had sought for the 2026 and 2030 tournaments combined.

Reliance Industries⁠ has become the most influential player in India’s sports broadcasting market, spending billions of dollars on cricket rights across television and streaming. The Reliance-Disney venture now sits at the centre of India’s live sports ecosystem, carrying everything from the IPL and ICC tournaments to major international football leagues.

And yet, even with football’s popularity in India, the World Cup doesn’t command cricket-like valuations. A case in point is billionaires LN Mittal and Adar Poonawalla acquiring the IPL team Rajasthan Royals this week for $1.65 billion.

Part of that is structural. Cricket dominates India’s sports advertising market. For broadcasters, major cricket tournaments offer predictable advertiser demand, prime-time audiences and stronger monetisation visibility. The 2026 World Cup, being held in North America, presents a more difficult equation. Most matches will air past midnight in India because of different time zones, reducing television reach and advertising potential.

The broader advertising environment matters as well. An economic slowdown linked to the West Asia conflict has weakened ad sentiment, making broadcasters more cautious about committing large sums for global sporting rights.

This creates an unusual contrast. The World Cup is one of the world’s largest sporting events, with India and China together accounting for more than one-fifth of global digital streaming reach during the 2022 tournament. Yet broadcasters appear increasingly unwilling to value audience scale in isolation.

That may reflect a broader shift in the media business itself. For years, streaming platforms and broadcasters spent aggressively to secure sports rights, betting that scale and subscriber growth would eventually justify the cost. But advertising markets have become less predictable, streaming profitability more important, and investors less willing to reward expansion without clear returns.

The result is that even global sporting events are no longer guaranteed escalating rights values in every market.

Negotiations may still conclude before the tournament begins. But the current situation already says something important about India’s media landscape: attention remains abundant, but monetising it is becoming far more selective.

 

Opening the System

 

After live sports, let’s turn to another system increasingly shaped by technology, scale and interconnectedness: finance.

This week, the Securities and Exchange Board of India made two very different announcements. One was about expanding access to overseas-listed debt through online bond platforms linked to GIFT City. The other was about rising cybersecurity risks from AI-driven systems across India’s financial markets.

Taken separately, they may look like routine regulatory developments. Together, they point to something broader: India’s financial system is becoming more open, more digital and more globally connected, as regulators try to widen that system while also preparing for the vulnerabilities that come with it.

In a consultation paper, SEBI proposed allowing online bond platforms to distribute products regulated by the International Financial Services Centres Authority, including overseas-listed debt securities linked to GIFT City. The regulator also proposed allowing these platforms to offer tax-saving bonds issued by state-owned companies.

These technical changes reflect a larger shift in how India’s financial system is evolving. For decades, Indian finance has remained heavily bank-centric. Most household savings flowed into deposits, while bond market participation outside institutions stayed relatively limited. Digital bond platforms have begun to change that slowly by making fixed-income products more visible and accessible to retail investors.

The proposal linked to GIFT City pushes that opening further. It creates another channel through which Indian investors can access products tied to international financial markets without leaving the domestic regulatory framework entirely.

SEBI’s second move reflects a different reality: the more connected markets become, the harder they are to isolate from global risks.

The regulator issued an advisory in which it warned financial entities about cybersecurity vulnerabilities linked to advanced AI-based tools, such as Anthropic’s Mythos, used for system monitoring and risk detection. It also announced a dedicated task force (cyber-suraksha.ai) bringing together exchanges, depositories, clearing corporations and other market participants to assess AI-related cyber threats.

The concern is not simply about hacking. It is about speed. Modern financial systems operate through tightly-linked digital infrastructure where disruptions can spread rapidly across institutions and markets. AI increases both capability and complexity—helping firms identify risks faster but also increasing the speed at which failures or vulnerabilities can cascade if safeguards weaken. That creates a balancing act regulators globally are increasingly confronting.

Financial systems are being opened up worldwide: more online access, more automation, more cross-border products. But every additional layer of connectivity also creates new operational risks that become harder to contain once systems are deeply integrated. India, too, is moving through that transition.

Collectively, these changes point toward a financial system that is becoming broader, faster and more technology-dependent – one where resilience may increasingly matter as much as expansion itself.

 

The Missing Fuel

 

After finance, let’s turn to something more basic – energy that reaches directly into Indian households. India’s LPG consumption fell 16.2% year-on-year in April to 2.2 million tonnes. 

Since early March, severe disruption to shipping through the Strait of Hormuz after the US and Israel attacked Iran has sharply reduced vessel movement through one of the world’s most important energy corridors. For India, the impact has been especially visible in LPG because the country depends on imports for roughly 60% of its consumption – and about 90% of those imports typically come from the Middle East.

The constraint is visible in import data. India imported roughly 2 million tonnes of LPG a month for most of 2025-26. That fell to 1.1 million tonnes in March and dropped further to 0.95 million tonnes in April. Unlike crude oil, LPG is deeply tied to household consumption. More than 330 million Indian households use LPG connections for cooking, which means supply bottlenecks quickly become politically and economically sensitive.

India has responded on multiple fronts. Domestic refineries have increased LPG production by around 40% compared with pre-conflict levels, partially offsetting the fall in imports. Refiners are also seeking cargoes from alternative suppliers such as the US, Australia and Russia, while the government has prioritised household consumption over industrial supply.

Even so, the gap remains difficult to bridge and reflects constrained availability and rationing, particularly for industrial users. Moreover, falling consumption does not mean reduced import dependence. If anything, the episode has exposed how concentrated parts of India’s energy supply chain remain. Around 54% of India’s LPG consumption effectively depended on shipments moving through Hormuz before the conflict disrupted traffic. Few supply systems remain comfortable with that level of concentration once a chokepoint comes under stress.

Markets often focus first on crude oil prices during geopolitical crises. But this episode shows that the more immediate disruptions can sometimes emerge elsewhere – in products that are less globally visible, but more directly tied to everyday consumption. The larger question is not whether India can navigate the current disruption. It probably can, through diversification and temporary adjustments. The question is whether energy security in the future will require not just diversified suppliers, but reduced dependence itself.

 

 

 

Market wrap

 

India’s stock markets climbed this week but gains were limited on renewed worries about high crude oil prices as a peace deal between the US and Iran remained elusive. The Sensex inched 0.5% higher this week while the Nifty rose 0.7%. 

In the broader market, the small-cap index surged 4.1% and the mid-caps jumped 3.6% as they continued their outperformance over the large-caps after a strong rally in April.

As many as 14 of the 16 major sectors logged weekly gains. The auto index added 5.2%, thanks to robust quarterly results by Mahindra & Mahindra, Bajaj Auto and Hero MotoCorp. 

M&M was the top Nifty performer, followed by Bajaj Auto. Both stocks added more than 7% each. Tata Motors Passenger Vehicles, Maruti Suzuki and Eicher also closed in the green.

Shriram Finance, Asian Paints, Adani Ports, Apollo Hospitals, Grasim, HDFC Life and IndiGo parent Interglobe Aviation were among the other top performers with gains of more than 5% each. Index heavyweights HDFC Bank and Reliance Industries clocked moderate gains.

State-run ONGC was the biggest loser this week, falling 6.8%, followed by state-run Coal India. State Bank of India recorded to a weekly loss of 4.6%, thanks to a 6.4% drop on Friday after missing its quarterly profit expectations. All five Nifty IT stocks—TCS, Wipro, HCL Tech, Infosys and Tech Mahindra—slipped this week. Bharti Airtel, ITC and Dr Reddy’s Labs were among the others that closed in the red.

 

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