British-Swedish pharmaceutical (pharma) major AstraZenecais about to come up with company’s global capability centre (GCC) in Chennai. It will, reportedly, be the largest such centre globally.
This is the latest development in Tamil Nadu’s emergence as India’s latest hotspot for GCCs, with the potential to create 50,000 jobs with more than 40 global companies in the past three years, intensifying competition in the region.
AstraZeneca joins Pfizer and Roche, who have also established their centres in the state.
Global giants such as World Bank Group (the largest outside its headquarters), Standard Chartered, Hitachi Energy, Renault Nissan, Caterpillar, Nokia, and Ford have chosen Chennai for their largest centres globally.
Recent investments since 2021 include Adidas, Mizuho, UPS, Harman, Hitachi Energy, Deloitte USI, AT&T, and ZoomInfo.
This underscores that Tamil Nadu is coming up as the new Silicon Valley of India, replacing Bengaluru with opportunities for jobs increasing with each passing year.
The surge in GCCs and technological activities is visible in Chennai’s record office space absorption and supply figures.
In 2023, Chennai recorded its highest-ever leasing and a decade-high supply, with total absorption reaching 10 million square feet (msf), up from 6.2 msf in 2022 and 3.7 msf in 2021, while supply stood at 6.4 msf.
The boom in Chennai’s market over the past three years poses strong competition to cities like Bengaluru, contributing 30 per cent of India’s GCC units, Mumbai (13 per cent), Pune (12 per cent), and Hyderabad (12 per cent).
Logistics and engineering research and development (R&D) have been major areas of investment in Chennai in recent times.
What’s leading to this growth?
It has been learnt from several quarters that in comparison to Bengaluru, National Capital Region and Mumbai, Tamil Nadu offers much lower operational costs at scale.
The state’s talent pool, reportedly, has the lowest attrition rate in the country.
Moreover, as per the Cushman & Wakefield report, Coimbatore ranks as the top Tier-II city for GCCs, based on factors like availability of engineering graduates, quality of life, ease of doing business and supporting governance.
To support high-end product development and research in the state, the government launched the R&D policy in June 2022. The policy provides subsidies on office space lease rentals or land costs, up to Rs 25 crore for plant and machinery, and training subsidies up to Rs 1.2 lakh per employee for incremental hiring, among other incentives.
The recent state Budget also lined up payroll subsidies for new GCCs offering high-value employment in the state.
The expanding pool of skilled professionals, both in scale and quality, is driving the GCC boom.
TRB Rajaa, Minister for Industries and Investment Promotions and Commerce in the Tamil Nadu Cabinet aims to transform Tamil Nadu, the Knowledge Capital of India, into the Talent Capital of the World.
And the development in terms is to a large extent cementing Tamil Nadu’s reputation as a premier investment destination.
Follow us
