The rise of Global Capability Centres (GCCs) reflects India’s growing influence in global services. With talent, scale, and cost advantages, India is now indispensable to the way multinationals run critical functions.
But alongside capability lies another imperative: credibility. In cross-border services, that credibility rests on how Indian entities approach structuring, pricing, and governance. Done right, these aspects are not burdensome compliance requirements; they are the scaffolding that allows India’s services story to scale with trust.
The GST Lens
Exports of services are zero-rated under GST, but only if the entity is registered and has secured a Letter of Undertaking (LUT). A procedural step on paper, but one that ensures cash flows remain efficient and exports frictionless.
Transfer Pricing: Aligning Substance and Form
Where services are rendered to group entities, transfer pricing norms apply. Arm’s-length pricing must be demonstrated through a benchmarking study and FAR analysis.
Annual filings, particularly Form 3CEB, formalise this. But credibility comes from evidence beneath: timesheets, work orders, agreements. Individually optional, together they demonstrate substance and show India’s service exports meet global standards.
Banks as Enablers
Banks are more than conduits for remittances. The right partner brings expertise, systems, and guidance that align transactions with FEMA rules and smoothen reporting.
Private banks with specialised compliance teams are often best placed to anticipate questions and keep flows seamless. In this sense, a strong bank is not a regulator, but a trusted enabler.
Agreements and Governance
Contracts, whether for services, IP, or licensing
, must go beyond defining obligations. Properly structured, they embed compliance with transfer pricing, FEMA, and transparency requirements.
Governance choices matter too. Avoiding unintended permanent establishments and maintaining chinese walls ensures long-term resilience and credibility.
The Bigger Picture
Each cross-border service transaction signals how Indian businesses operate. For GCCs, which have evolved from support centres to global hubs, compliance and governance are not optional, they are the foundation of India’s service economy.
The lesson is simple: India’s GCC story is powerful, but its long-term success for companies depends on more than talent and cost. It depends on structuring with discipline, pricing with transparency, and governing with foresight of Indian law.
