The Rising Role of India in the Global AI Talent Landscape
Introduction
Non-tech multinational companies are facing significant challenges in hiring artificial intelligence (AI) engineers within their home countries. As a result, many are increasingly looking towards India to fill this gap. In this article, we explore how companies like McDonald’s and UK-based insurer Bupa are establishing Global Capability Centers (GCCs) in India, driven by the escalating AI talent war among tech giants such as Alphabet, Meta, and OpenAI.
The Shift Towards Global Capability Centers
Traditionally, these GCCs were focused on support services. However, they are now taking on much more sophisticated roles, ranging from real-time equipment monitoring to personalized customer recommendations. According to a report by the Financial Times, this evolution reflects a broader trend toward leveraging AI in various business functions.
India as a Hub for AI Talent
India’s substantial and scalable AI talent pool makes it an attractive destination for these multinational companies. Lalit Ahuja, CEO of consultancy ANSR, shares that GCCs are becoming the “strategic AI backbone” of many organizations, enabling them to leverage local talent for complex AI projects.
Tesco’s Transformation
One notable example is supermarket chain Tesco, which repurposed its GCC in India in 2019. The focus shifted towards AI-based solutions aimed at reducing operational costs. Sumit Mitra, CEO of Tesco Business Solutions, remarks that their Bengaluru center, with nearly 5,000 employees, has transitioned from “labor arbitrage” to “intellectual arbitrage.” A significant achievement has been the implementation of centralized refrigerator temperature monitoring, resulting in millions of pounds saved annually in food waste.
Bridging the Innovation Gap
Despite having one of the largest pools of tech workers globally, India still trails behind the US and China in terms of AI innovation. GCCs are seen as a mechanism to bridge this gap, offering access to advanced resources such as large language models from global firms. This capability allows companies to retain AI development in-house, transforming these centers into innovation hubs that contribute to global operations.
High-Value Tasks in GCCs
The evolving role of GCCs extends beyond routine support functions. According to Jaspreet Singh, head of Grant Thornton Bharat’s GCC practice, these centers are increasingly involved in high-value tasks such as agentic AI and advanced analytics. However, challenges remain, including critical issues related to limited digital and physical infrastructure outside major cities.
Talent Training and Retention Challenges
The urgency to train and retain talent is imperative. As GCCs increasingly aim to handle more sophisticated AI tasks, they require a workforce that is not only skilled but also adaptable to rapid technological advancements.
Growth of India’s Back Office Industry
India’s back office industry has experienced remarkable growth, rising from $11.5 billion in 2010 to $65 billion in 2023, employing approximately 1.8 million people. Brokerage firm Goldman Sachs notes that research and development now constitutes 55% of GCC revenue, highlighting the increasing importance of this sector.
Cost Advantages of Indian AI Talent
Competitive Pricing
Another significant factor for companies relocating their AI operations to India is cost. Indian AI talent typically costs between 15–25% of what organizations pay in established global hubs like the US. This cost advantage is particularly pronounced for senior and research-level roles.
Salary Comparisons
According to data from AMS, salaries in the US, UK, or Europe can be nearly five times higher than the average salary for similar skill sets in India. For mid-level roles, such as machine learning engineers or data scientists, the salary difference ranges between two to three times, emphasizing the attractiveness of Indian talent for global companies.
Conclusion
As the AI talent war intensifies, India’s emergence as a global hub for AI capabilities is becoming increasingly undeniable. With the establishment of GCCs, multinational companies are finding innovative solutions and cost-effective talent, positioning India as a vital player in the realm of artificial intelligence.
FAQ Section
1. Why are multinational companies turning to India for AI talent?
Multinational companies are attracted to India because of its vast and scalable AI talent pool, which allows for more sophisticated AI applications and cost-effective hiring.
2. What roles do Global Capability Centers (GCCs) play?
GCCs have evolved from support functions to handling high-value tasks such as advanced analytics and agentic AI, serving as the strategic backbone for many organizations.
3. How does the salary of Indian AI talent compare with that in the US or Europe?
Indian AI talent typically costs 15–25% of what companies pay in the US or Europe, with salary differences being nearly five times higher for similar roles.
4. What challenges does India face in becoming a leader in AI innovation?
Despite its large workforce, India lags behind the US and China in AI innovation. Key challenges include limited digital infrastructure and the need for effective talent training and retention strategies.
5. What are some successful examples of GCCs in India?
Companies like Tesco have successfully repurposed their GCCs in India to focus on AI solutions, achieving significant operational cost reductions and enhancing their innovation capabilities.
