03 March 2024 – In a surprising revelation, the estimation of India’s Global Capability Centers’ (GCCs) export revenue is causing a stir, as figures presented by Sandeep Panat of Wizmatic Consulting significantly differ from the widely accepted Nasscom estimate. While Nasscom puts the export revenue at $46 billion, Panat’s analysis of financial statements suggests a staggering $120.5 billion, more than double the previous estimate.
About Global Capability Centers (GCCs):
GCCs, including major foreign IT services companies like Accenture, Capgemini, and DXC, play a crucial role in India’s technology sector. These centers serve as offshore units providing internal services to their global parent enterprises, contributing significantly to India’s IT export revenue.
Nasscom’s estimation methodology relies on factors like transfer pricing, overall expenses, and employee billing rates derived from different categories of businesses. However, Panat’s analysis, based on meticulous scrutiny of financial statements filed by foreign companies, proposes a significantly higher export figure, even if excluding certain entities.
If Panat’s estimates are accurate, it implies a substantial underestimation of the contribution of GCCs to India’s tech sector. This revelation could have far-reaching consequences for policy formulation, industry analysis, and strategic planning.
Conclusion and Industry Impact:
The conflicting figures bring to light the need for a more accurate and transparent method of estimating the export revenue of GCCs. If Panat’s higher figures hold, it prompts a reevaluation of the size and significance of India’s tech sector, necessitating adjustments in policies and industry strategies to align with the actual scale of contributions from these global centers.
