Earlier this month, British-Swedish pharmaceutical (pharma) major AstraZeneca announced the expansion of its global capability centre (GCC) in Chennai, marking it as the company’s largest such centre worldwide.

This development underscores Tamil Nadu’s emergence as India’s latest hotspot for GCCs, with over 50,000 jobs created by 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.

“Tamil Nadu has become a preferred destination for global pharma leaders like Pfizer, Roche, and AstraZeneca to establish their GCCs and innovation hubs. This achievement is a testament to our government’s targeted efforts to attract high-quality jobs,” said Tamil Nadu Industries Minister T R B Rajaa.

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 driving this growth?

“Compared to Bengaluru, National Capital Region, and Mumbai, Tamil Nadu offers much lower operational costs at scale. We also have an added advantage in terms of a niche talent pool available with the lowest attrition rate in the country,” noted V Vishnu, managing director and chief executive officer of Guidance Tamil Nadu, an agency supporting investors.

Interestingly, according to 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 good governance.

“We’ve recently focused on attracting logistics GCCs with great success. Many logistics majors have set up their GCCs in Chennai. We’re now witnessing a considerable influx of pharma GCCs, cementing our reputation as a premier investment destination. Our overarching goal is to transform Tamil Nadu, the Knowledge Capital of India, into the Talent Capital of the World,” Rajaa added.

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 minister also highlighted the expanding pool of skilled professionals, both in scale and quality, as driving the GCC boom.

“Through initiatives like the Naan Mudhalvan scheme, our students are equipping themselves with cutting-edge skills in emerging sectors, ensuring they are future-ready. Having upskilled them, the next logical step is to foster an ecosystem where they can secure high-quality jobs close to home. Therefore, we are deeply committed to creating opportunities that match their talents by engaging directly with industry leaders and encouraging them to bring high-quality jobs to Tamil Nadu,” Rajaa added.

First Published: Jul 14 2024 | 3:01 PM IST