The expansion reflects a shift in how German companies are using India. Instead of focusing primarily on cost efficiencies and traditional support functions, Mittelstand companies are increasingly leveraging their Indian GCCs for engineering, artificial intelligence, software, digital transformation, research and development, and product innovation.
More than 80 German companies currently operate over 150 GCC units in India, employing more than 130,000 professionals. According to the report, these centres are increasingly taking on engineering, technology and innovation mandates.
The report said German Mittelstand companies are moving from an export-led model towards what it describes as “capability-led globalisation”. The shift is being driven by the growing importance of software, AI, data and connected products, along with shortages of engineering and digital talent in Germany.
GCCs enable German companies to access specialised talent in India while retaining control over intellectual property, product ownership and core technical capabilities. India produces around 2.3 million to 2.5 million STEM graduates annually, according to the report, while its engineering ecosystem is concentrated across established clusters such as Bengaluru, Hyderabad, Pune, Chennai and the National Capital Region.
India’s GCC ecosystem comprises more than 1,700 centres employing over 1.9 million people. The report said this ecosystem provides German companies with access to experienced talent, technology partners, universities and start-ups.
More than half of India’s GCCs have evolved into portfolio or transformation hubs, while nearly 90% operate across multiple functions. The trend indicates a broader shift towards using India as a capability and innovation hub for global operations rather than primarily as a cost-efficiency destination.
