C Shivakumar @ CHENNAI:
Tamil Nadu is increasingly being judged not as an alternative to India’s larger technology hubs, but as a more predictable one for multinational companies rethinking how and where to build their global capability centres (GCCs.
The state has quietly assembled the building blocks in the last five years that matter most to global enterprises --- a deep and stable talent pool, competitive real estate economics and an operating environment that favours long-duration, engineering-led work.
As a result, Tamil Nadu is emerging as one of the few Indian states with a credible multi-city GCC strategy, anchored by Chennai and supported by fast-rising Coimbatore.
Chennai’s office market delivered one of its strongest performances on record in 2025, with total leasing volumes touching 10.1 million sq ft — the second-highest annual absorption after the 2023 peak, according to Knight Frank India. Leasing rose 24 per cent year-on-year, even as activity moderated slightly in the July–December period.
GCCs were at the heart of that momentum. In the second half of 2025, they accounted for 41 per cent of leasing, driven largely by manufacturing-led and multi-functional operations rather than pure IT services. Flexible workspace operators, catering to companies seeking managed and scalable formats, contributed another 23 per cent of leasing, reflecting changing corporate space strategies.
The demand is not evenly spread across sectors — or geographies. Data from Colliers shows that between 2020 and 2025, Chennai recorded cumulative GCC leasing of 16.1 million sq ft, with US-headquartered firms accounting for nearly three-quarters of that footprint.
BFSI and technology together made up more than half of overall GCC demand, while engineering and manufacturing — traditionally associated with captive centres outside India — emerged as a structurally important pillar, accounting for 19 per cent of total leasing.
European GCCs, by contrast, skewed heavily towards engineering and manufacturing, reflecting Chennai’s long-standing industrial base and proximity to automotive and electronics supply chains. UK-linked centres showed a strong bias towards financial services, underlining the city’s growing role in regulated, compliance-heavy work.
What sets Chennai apart is not headline scale but operating confidence. The city supports more than 600,000 experienced technology professionals, supplemented by an annual pipeline of over 85,000 graduates, according to analysis by ANSR. For global firms running large, multi-year programmes in AI, data and core engineering, that depth translates into lower attrition risk and better retention of institutional knowledge.
The talent base is anchored by institutions such as IIT Madras, Anna University and VIT Chennai, which continue to produce engineering-first graduates aligned with enterprise needs rather than short-cycle technology trends. GCCs are increasingly relying on the city for platform development, applied AI and large-scale data programmes where continuity matters as much as speed.
Costs have reinforced that appeal. Grade A office rentals in Chennai, typically in the ₹60–85 per sq ft range, remain competitive relative to Bengaluru, Hyderabad and Pune, even as infrastructure-led corridors such as Old Mahabalipuram Road and GST Road absorb a growing share of new demand. Peripheral business districts along these corridors accounted for 36 per cent of second-half leasing in 2025, reflecting both availability and improved connectivity.
Policy is now being layered onto those fundamentals. The Tamil Nadu government has announced plans to establish a dedicated desk to fast-track clearances and attract research and development–focused GCCs, as it seeks to pull investment not just from overseas but also from companies relocating operations from other Indian states.
“This is about faster clearances for all the GCCs wanting to set up office in Tamil Nadu,” Industries Minister T R B Rajaa said at the GCC Next Summit 2025 in Chennai. “We want to build a thriving research and development ecosystem in Chennai and attract GCCs moving from other states — thanks to our availability of A-grade commercial space and deep talent pool.”
The state has also signed a strategic partnership with ANSR to help multinational firms establish and scale centres in Tamil Nadu — a move officials describe as one of the most consequential interventions yet in the state’s GCC push.
Crucially, the strategy is not limited to Chennai. Further west, Coimbatore is emerging as the state’s second pillar in the GCC landscape. Long associated with manufacturing, the city reached an inflection point in 2025 as enterprises began to view it as a credible execution hub for analytics-led and AI-adjacent work.
ANSR estimates suggest Coimbatore now has more than 231,000 experienced technology professionals and produces around 60,000 graduates annually, supported by STEM-focused institutions such as PSG Tech, Amrita and CIT.
For global companies, the appeal of Tamil Nadu increasingly lies in optionality: the ability to scale large teams in Chennai, diversify risk into Coimbatore, and operate within a single regulatory and policy framework. Analysts estimate that nearly 15 per cent of India’s overall GCC demand could originate from Chennai and Coimbatore combined in the coming years.
As competition among Indian states intensifies for high-value global work, Tamil Nadu rather than chasing rapid expansion at any cost, is positioning itself as a steady, engineering-led platform for multinational firms building the next generation of enterprise capability centres — not just service hubs, but engines of innovation.
Factfile:
Nearly 15% of India’s overall GCC demand is estimated to originate from Chennai and Coimbatore combined.
Total GCC leasing in Chennai (2020–25): 16.1 million sq ft of cumulative GCC leasing over five years.
Origin of GCC demand in Chennai:
US firms: 11.8 million square feet (msf)
EU firms: 1.4 msf
UK firms: 1.5 msf
Others: 1.4 msf
Top GCC sectors by leasing share
BFSI: 29%
Technology: 27%
Engineering & Manufacturing: 19%
US GCCs: Balanced mix of BFSI (30%) and technology (32%)
EU GCCs: Engineering & manufacturing dominant (72%)
UK GCCs: BFSI-led (73%)
Emerging sectors beyond core IT
Healthcare: 6% of GCC leasing
Consulting: 4%
GCCs accounted for 41% of total leasing in the second half of 2025.
Cost competitiveness: Grade A office rentals in Chennai range between ₹60–85 per sq ft, lower and more stable than major peer markets.
Talent pipeline strength: 600,000+ experienced technology professionals in Chennai; 85,000+ graduates annually
Tamil Nadu is increasingly being judged not as an alternative to India’s larger technology hubs, but as a more predictable one for multinational companies rethinking how and where to build their global capability centres (GCCs.
The state has quietly assembled the building blocks in the last five years that matter most to global enterprises --- a deep and stable talent pool, competitive real estate economics and an operating environment that favours long-duration, engineering-led work.
As a result, Tamil Nadu is emerging as one of the few Indian states with a credible multi-city GCC strategy, anchored by Chennai and supported by fast-rising Coimbatore.
Chennai’s office market delivered one of its strongest performances on record in 2025, with total leasing volumes touching 10.1 million sq ft — the second-highest annual absorption after the 2023 peak, according to Knight Frank India. Leasing rose 24 per cent year-on-year, even as activity moderated slightly in the July–December period.
GCCs were at the heart of that momentum. In the second half of 2025, they accounted for 41 per cent of leasing, driven largely by manufacturing-led and multi-functional operations rather than pure IT services. Flexible workspace operators, catering to companies seeking managed and scalable formats, contributed another 23 per cent of leasing, reflecting changing corporate space strategies.
The demand is not evenly spread across sectors — or geographies. Data from Colliers shows that between 2020 and 2025, Chennai recorded cumulative GCC leasing of 16.1 million sq ft, with US-headquartered firms accounting for nearly three-quarters of that footprint.
BFSI and technology together made up more than half of overall GCC demand, while engineering and manufacturing — traditionally associated with captive centres outside India — emerged as a structurally important pillar, accounting for 19 per cent of total leasing.
European GCCs, by contrast, skewed heavily towards engineering and manufacturing, reflecting Chennai’s long-standing industrial base and proximity to automotive and electronics supply chains. UK-linked centres showed a strong bias towards financial services, underlining the city’s growing role in regulated, compliance-heavy work.
What sets Chennai apart is not headline scale but operating confidence. The city supports more than 600,000 experienced technology professionals, supplemented by an annual pipeline of over 85,000 graduates, according to analysis by ANSR. For global firms running large, multi-year programmes in AI, data and core engineering, that depth translates into lower attrition risk and better retention of institutional knowledge.
The talent base is anchored by institutions such as IIT Madras, Anna University and VIT Chennai, which continue to produce engineering-first graduates aligned with enterprise needs rather than short-cycle technology trends. GCCs are increasingly relying on the city for platform development, applied AI and large-scale data programmes where continuity matters as much as speed.
Costs have reinforced that appeal. Grade A office rentals in Chennai, typically in the ₹60–85 per sq ft range, remain competitive relative to Bengaluru, Hyderabad and Pune, even as infrastructure-led corridors such as Old Mahabalipuram Road and GST Road absorb a growing share of new demand. Peripheral business districts along these corridors accounted for 36 per cent of second-half leasing in 2025, reflecting both availability and improved connectivity.
Policy is now being layered onto those fundamentals. The Tamil Nadu government has announced plans to establish a dedicated desk to fast-track clearances and attract research and development–focused GCCs, as it seeks to pull investment not just from overseas but also from companies relocating operations from other Indian states.
“This is about faster clearances for all the GCCs wanting to set up office in Tamil Nadu,” Industries Minister T R B Rajaa said at the GCC Next Summit 2025 in Chennai. “We want to build a thriving research and development ecosystem in Chennai and attract GCCs moving from other states — thanks to our availability of A-grade commercial space and deep talent pool.”
The state has also signed a strategic partnership with ANSR to help multinational firms establish and scale centres in Tamil Nadu — a move officials describe as one of the most consequential interventions yet in the state’s GCC push.
Crucially, the strategy is not limited to Chennai. Further west, Coimbatore is emerging as the state’s second pillar in the GCC landscape. Long associated with manufacturing, the city reached an inflection point in 2025 as enterprises began to view it as a credible execution hub for analytics-led and AI-adjacent work.
ANSR estimates suggest Coimbatore now has more than 231,000 experienced technology professionals and produces around 60,000 graduates annually, supported by STEM-focused institutions such as PSG Tech, Amrita and CIT.
For global companies, the appeal of Tamil Nadu increasingly lies in optionality: the ability to scale large teams in Chennai, diversify risk into Coimbatore, and operate within a single regulatory and policy framework. Analysts estimate that nearly 15 per cent of India’s overall GCC demand could originate from Chennai and Coimbatore combined in the coming years.
As competition among Indian states intensifies for high-value global work, Tamil Nadu rather than chasing rapid expansion at any cost, is positioning itself as a steady, engineering-led platform for multinational firms building the next generation of enterprise capability centres — not just service hubs, but engines of innovation.
Factfile:
Nearly 15% of India’s overall GCC demand is estimated to originate from Chennai and Coimbatore combined.
Total GCC leasing in Chennai (2020–25): 16.1 million sq ft of cumulative GCC leasing over five years.
Origin of GCC demand in Chennai:
US firms: 11.8 million square feet (msf)
EU firms: 1.4 msf
UK firms: 1.5 msf
Others: 1.4 msf
Top GCC sectors by leasing share
BFSI: 29%
Technology: 27%
Engineering & Manufacturing: 19%
US GCCs: Balanced mix of BFSI (30%) and technology (32%)
EU GCCs: Engineering & manufacturing dominant (72%)
UK GCCs: BFSI-led (73%)
Emerging sectors beyond core IT
Healthcare: 6% of GCC leasing
Consulting: 4%
GCCs accounted for 41% of total leasing in the second half of 2025.
Cost competitiveness: Grade A office rentals in Chennai range between ₹60–85 per sq ft, lower and more stable than major peer markets.
Talent pipeline strength: 600,000+ experienced technology professionals in Chennai; 85,000+ graduates annually
