Introduction

In search of innovation, efficiency and a path to world-class talent, global businesses have pursued India as the preferred destination for global capability centres. Global capability centres (“GCCs”) are offshoring centres established by firms to provide a variety of services to their parent firms. As an integral part of their global organisational structure, they offer specialised skills in fields like Information Technology (“IT”), Research and Development (“R&D”), customer care, and other aspects of their business operation. India’s growth as a preferred destination is a result of a carefully crafted approach that spans infrastructure, innovation, talent development, and supportive policies.[i]

While companies from the United States dominate the global capability centre landscape in India, more than One Hundred & Thirty businesses from the United Kingdom have instituted two hundred and fifty plus GCCs in India, ultimately providing USD 6.5 Billion to the Indian GCC economy in 2024 alone. The financial year of 2025 was India’s most prominent year with respect to the establishment of GCCs. Approximately 50 new GCCs opened in just the first two quarters of 2025. Meanwhile, Pune and NCR expanded rapidly in digital, product, and engineering portfolios, while Bengaluru and Hyderabad pioneered the new setups.[ii]

However, the institution of GCC is not a straightforward administrative task. Foreign companies undergo complex decision-making, such as setting the legal structure of a GCC, a decision that directly impacts taxation, compliance and scalability. Other challenges include cross-border capital compliance, labour laws and employment compliance as well as data protection and regulatory exposure[iii].

This article discusses an intersection between fractional general counsel (“Fractional GC”) and GCCs, primarily focusing on how India is growing as a preferred location for foreign entities to establish a GCC. The research covers why foreign companies are choosing India for the establishment of a GCC, the Fractional General Counsel’s strategic role during GCC setup, and its regulatory compliance.

Why Foreign Companies are Choosing India for GCCS

GCCs in India have now become strategic assets that own product roadmaps and influence the global strategies of their parent company. The first and foremost reason for choosing India as a platform for GCC is that the country generates over 1.5 million engineering graduates every year, creating a diverse talent pool in cybersecurity and data science. Thus, foreign entities get access to the world’s deepest tech talent pool[iv].

Comparatively, the operational costs in India remain lower than those incurred in countries like North America, Europe and other developed markets[v]. Other reasons for choosing India as a platform for GCC include the fact that the country has established itself as a global technology hub with its infrastructure and startup ecosystem, ultimately transforming GCC into an innovation centre rather than just a support office.

The Indian government provides foreign entities with a business-friendly environment and continues to promote foreign investment through digital compliance systems, initiatives like startups and liberalised Foreign Direct Investment (“FDI”) policies.

However, the foreign entrants may also face multiple challenges when entering the market of GCCs. The main operational challenges for directors in the GCC are sourcing specialised engineering talent and standardising cross-border workflows. Cloud architects are fiercely competed for in organisations. Candidates in the digital space are being offered salary hikes between 35 per cent and 55 per cent on a regular basis. Wage inflation erodes short-term cost arbitrage benefits[vi].

Furthermore, another challenge that arises is the concept of Volume hiring at all costs doesn’t support long-term commercial goals. Companies are shifting to paradigms of value-based retention.

The Role of a Fractional GC for GCCS in India: Bridging Law Firms and Foreign Legal Departments

A Fractional GC can play a critical role for foreign companies setting up or operating GGCs in India, especially in the emerging Micro-GCC model, a lean, single-function or small-footprint centre that a foreign company establishes in India without immediately building a large local team.

For many foreign legal departments, India presents both opportunity and complexity. Setting up a GCC involves employment, corporate, commercial, regulatory, data protection, contracting, vendor management, compliance, IP, and day-to-day operational issues. A traditional law firm may be useful for specialist advice, but it may not always provide the embedded, business-facing legal support that an in-house legal department requires.

This is where the Fractional GC model bridges the gap. A Fractional GC acts as an extension of the foreign legal team in India. The role combines the discipline and technical depth of law-firm experience with the commercial judgment and execution mindset of in-house counsel. This makes the model particularly useful for companies that need senior legal oversight in India but may not yet require, or want to immediately hire, a full-time General Counsel or large internal legal team.[vii]

The Fractional GC can support the GCC from the setup stage itself, including:

  1. India entry and GCC structuring support. Advising on the legal and operational framework for setting up the GCC in India, including corporate structure, contracts, employment documentation, vendor arrangements, compliance workflows, and governance processes.[viii]
  2. Day-to-day legal advisory. Providing ongoing support on commercial contracts, employment issues, vendor negotiations, data protection, IP, internal policies, operational escalations, and business queries.
  3. Risk identification and mitigation. Helping the foreign legal and business teams identify legal, regulatory, contractual, employment, data, and operational risks early, and creating practical mitigation strategies, for example, catching that a vendor SaaS agreement does not in fact assign IP ownership to the GCC before it is signed, or flagging an employee-misclassification exposure before it becomes a dispute.
  4. Coordination with law firms and specialists. Knowing when to handle matters internally, when to escalate, and which external resources to use. A Fractional GC can manage Indian law firms, specialists, company secretaries, tax advisors, HR consultants, and compliance vendors in a cost-efficient and coordinated manner.
  5. Cost-efficient legal coverage. Instead of immediately building a large in-house India legal team or over-relying on external law firms for every issue, the Fractional GC provides senior-level legal judgment on a flexible basis. This helps control cost while maintaining quality, accountability, and responsiveness.[ix]
  6. Extension of the foreign legal department. The Fractional GC becomes the India-facing legal arm of the parent company’s legal department, ensuring that local execution remains aligned with global legal, compliance, risk, and governance standards.

In short, for GCCs and Micro-GCCs in India, a Fractional GC is not just external counsel. The role sits between a law firm and an in-house legal department, offering strategic legal leadership, operational legal support, risk management, and coordinated execution in a flexible and cost-efficient manner. This model is especially relevant for foreign companies that need India legal coverage, but want it to be practical, embedded, commercially aware, and scalable.

Regulatory Compliance and Foreign Companies

When foreign businesses create GCCs in India, they frequently must manage cross-border operations and growth goals while negotiating a foreign legal and regulatory environment. The Fractional GC assists foreign businesses in instituting a legally sound operational foundation by giving direction for decisions pertaining to governance, contractual arrangements, intellectual property ownership etc. The model ensures that corporate structuring, commercial contracting, compliance requirements, and business expansion strategies stay in line by providing continuity across various legal challenges[x].

The Foreign Exchange Management Act, 1999 (“FEMA”) governs all cross-border money movement of an Indian entity or a foreign entity in business in India. For corporates with GCC operators, compliance with FEMA is not optional; crucial obligations for GCCs include timely reporting of foreign investments and realisation of export proceeds, compliance with legislation controlling cross-border loans and transfer pricing standards[xi].

The entity should also establish a data governance policy that complies with Digital Personal Data Protection Act, 2023 (“DPDPA”) and ensure that vendor agreements as well as service agreements contain Intellectual Property (“IP”) clauses and the company has a registered trademark. Furthermore, according to the sector the GCC belongs to, the corporation should adhere to the industry-related rules, such as those of the Reserve Bank of India (“RBI”) and the Securities and Exchange Board of India (“SEBI”) or standard data protection in the case of a healthcare GCC[xii].

Beyond Compliance: Creating Business Value

The essence of Fractional GC is not only about being compliant with the law, but also about becoming a key business partner who will facilitate the success of the organisation in the long term. A Fractional GC makes sure that early-stage issues like cleaning up contract language or employment disputes are addressed at the right time. Furthermore, Fractional GC becomes a vital part of the corporation’s leadership team; it provides continuity, thus attaining the knowledge of how growth can be achieved in the business and using it to bring more efficiency[xiii].

For foreign companies operating in GCCs, this embeddedness in business is critical. Decisions on matters such as training data, warranties and vendor terms move at a rapid pace, and a Fractional GC, who already knows the foundation of the corporation, will take less time to provide solutions. Moreover, by balancing innovation and risk management, Fractional GC enables a business to have greater confidence. Their involvement in such a field prepares the entity for new market opportunities and the institution of legal structures that support future expansion[xiv].

Thus, the role played by Fractional GC turns the legal department from a mere cost centre to a strategic function that supports the business. This type of contribution to foreign organisations setting up GCCs in India is bound to make a positive impact on their business operations.

Conclusion

The rise of GCCs in India is an indication of a greater change in how multinational corporations and foreign entities approach global operations. The GCCs are no longer observed as offshore centres; instead, they act as engines of innovation, research and development, and digital transformation. India’s large talent pool, supportive policy framework and factors like advanced technology systems have made the country one of the most attractive destinations for foreign entities seeking to expand GCC operations.

Nevertheless, there is no denying that GCCs involve a few legal and regulatory hurdles for foreign enterprises trying to gain a foothold in India. There are several aspects that need to be considered by foreign entities when setting up business in India, ranging from corporate structuring to data protection. Apart from the necessary legal acumen, it also requires a thorough knowledge of the commercial considerations of the parent organisation.

Hence, the Fractional GC emerges as a valuable strategic partner. It provides continuous and integrated legal leadership while keeping itself closely aligned with the corporation’s objectives. Furthermore, Fractional GC helps the foreign entities institute a strong legal foundation and contributes to informed decision-making, operational efficiency and sustainable growth.

References:

[i] Press Information Bureau, ‘From Policy to Prosperity: GCCs Leading India’s Growth Journey’ (11 December 2025) accessed 15 June 2026
[ii] Nitika Goel and others, ‘Why UK Firms Prefer India for Global Capability Centers (GCCs)’ (Zinnov, 26 June 2025) accessed 19 June 2026. Akshay Divate, ‘New GCCs in India: Who Launched, Who’s Expanding, and Who’s Coming Next (2024–2026)’ (Ceipal, 23 March 2026) accessed 16 June 2026.
[iii] CA Shiva Prakash H S, ‘Top 5 Regulatory Challenges GCCs Face in India, and How to Approach Them’ (Mukunda Shiva & Associates, 18 February 2026) accessed 16 June 2026.
[iv] Aditya Nagpal, ‘Why Companies Setup GCC in India (2026)’ (Wisemonk, 26 May 2026) accessed 16 June 2026.
[v] Manish Gupta, ‘GCC Setup in India: Why Foreign Companies Are Choosing India for Their Global Capability Centers’ (Manish Anil Gupta & Co., 5 June 2026) accessed 16 June 2026.
[vi] Ankit Desai, ‘Key Challenges When Setting Up a GCC in India and How to Overcome Them’ (INTECH Creative Services, 4 April 2026) accessed 16 June 2026.
[vii] Sigma Chambers, ‘Why Fractional General Counsels Are Transforming How Indian Startups Manage Legal Needs’ (Sigma Chambers) accessed 17 June 2026.
[viii] Stratrich Consulting, ‘Setting Up a GCC in India: Step-by-Step Guide for Foreign Companies’ (Stratrich Consulting, 2025) accessed 17 June 2026
[ix] Chanchal Sharma, ‘The Fractional GC: Senior Legal, Right When You Need It’ (Counselect, 2 April 2026) accessed 17 June 2026.
[x] Abha Kashyap, ‘Why Global Startups Need Fractional GC Support for U.S. Expansion’ (Kashyap Partners, 22 April 2026) accessed 17 June 2026.
[xi] irpr.network GCC Advisory Team, ‘FEMA Compliance for Foreign Companies in India: The 10 Rules That Matter’ (irpr.network, May 2026) accessed 17 June 2026
[xii] Aditi, ‘The Legal and Compliance Checklist for a New GCC Setup’ (Inductus GCC, 4 October 2025) accessed 17 June 2026.
[xiii] Lisa Temple, ‘7 Ways a Fractional GC Can Save Your Company Time, Money, and Risk’ (Temple Law PLLC, 17 February 2025)  accessed 17 June 2026.
[xiv] Drew Jacobs, ‘Fractional General Counsel for AI Startups’ (Jacobs Counsel, May 2026)  accessed 18 June 2026.

Gaurav Gupta is the Founder and Managing Partner at Bridge Counsels & Sanchi Hingorani is a 4th year Student at Christ (deemed to be) University, Delhi NCR and an intern at BridgeCounsels LLP.