Key Compliance Concerns for GCC Countries in India: Report

Regulatory compliance remains a key issue for GCC countries in India

India has emerged as a global hub for Global Capability Centers (GCCs), but regulatory compliance remains a key concern for most leaders, according to a report released on Thursday.

A joint report by industry body Nasscom and KPMG in India revealed that transfer pricing, SEZ and STPI compliance, labor laws, DPDPA and FEMA are among the leaders’ top priorities. The report draws on findings from surveys conducted in over 75 GCC countries, as well as discussions with senior management.

The report shows that as many as 81 percent of respondents ranked transfer pricing as their top regulatory priority for GCC countries in India.

A total of 67 percent of respondents mentioned SEZ (Special Economic Zones) and STPI (Technology Parks of India) regulations, while 60 percent cited labor law as their main concerns.

The next places were taken by DPDPA – the Digital Personal Data Protection Act (49%) and FEMA – the Foreign Exchange Management Act (37%).

“By treating compliance as a strategic imperative, GCCs can not only reduce risk but also increase operational efficiency and build trust among stakeholders… proactive engagement with the regulatory framework will be paramount to ensuring continued success and strengthening India’s position as a global business hub,” it said in the report.

The report further pointed out that India accounts for about half of the GCC countries in the world, with 1,580 of them in FY23. “Given this dynamic, it is estimated that there will be over 1,900 GCC countries in the country by 2025 and the market size will be $60 billion,” it said.

“Over the last few years, we have witnessed the remarkable growth of the GCC in India, driven by several factors.

“As the GCC continues its growth path, moving up the maturity curve, with factors such as blurring geographic boundaries and technological disruption, these centers continue to scan the dynamic risk landscape and adapt to successfully navigate it,” said the vice president Nasscom Srikanth Srinivasan.