Overview of incentives

landscape in India for

Global Capability Centres

December 2024
 Overview of State
incentives landscape in
India
State policies for Global Capability Centres
Nature and key parameters

Capital or investment
Cashback
linked
Fiscal incentives

Exemption/
Expenditure linked
cashback

Domestic sales/
Sales linked
GST-linked cashback

Parameters considered to determine eligibility

Location: Quantum of investment/employment: Business projections:

Emerging industrial zones to get Higher the investment/employment better Extent of incentives proportionate to revenue/
higher incentives the negotiation power expense

Key aspects to be considered ► Flexibility in negotiation ► Incentive quantum ► Payback period

for choice of State ► Incentive type ► Operative conditions ► Disbursement history

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State policies for Global Capability Centres

North India

► Uttar Pradesh Global Capability Centres Policy 2024, (Draft)

► Rajasthan Investment Promotion Scheme, 2024
► Haryana IT & ITeS Policy, 2024

West and Central India

► Gujarat IT/ITES Policy, 2022

► Madhya Pradesh Global Capabilities Centres Policy, 2024
(Draft)

South India
► Special Scheme to promote Global Capability Centres (GCCs)
in Tamil Nadu
► Karnataka Global Capacity Centre Policy, 2024
► Andhra Pradesh Information Technology (IT) and Global
Capability Centre (GCC) Policy (4.0), 2024

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Definition of Global
Capability Centres
under State Policies
State policies for Global Capability Centres North India
Definition in respective States

• Industrial Undertaking setting up a Global Capability Centre (GCC)/ Global In-house Centre / Offshoring
Uttar Pradesh Unit, which would be an offshore unit engaged in servicing its parent organisation or global affiliates in
Uttar Pradesh

Rajasthan • Centralized hub for specialized services, innovation, or business operations, supporting global enterprises
by Leveraging skilled talent, technology, and resources to enhance business efficiency and competitiveness

Note: Global Capability Centres are not defined under Draft Haryana IT & ITeS Policy, 2024

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State policies for Global Capability Centres South India
Definition in respective States

• Establishment which is a captive knowledge centre of Multi-National companies servicing the

parent/group/subsidiary entities
Tamil Nadu
• It should be engaged in activities such as design, Research & Development, data analytics, financial and
other expert services with clearly demarcated facilities within Tamil Nadu

• Fully owned, integrated hubs established by multinational corporations that are headquartered outside
Karnataka India, to leverage global talent, build intellectual property and enhance operational efficiency

• These centres serve the parent organization, managing a range of global functions like research and
development, IT services, business process outsourcing, and more, ultimately driving innovation, reducing
costs, value addition, and expanding the corporation's global impact

Note: Global Capability Centres are not defined under Andhra Pradesh Information Technology (IT) & Global Capability Centers (GCC) Policy (4.0), 2024

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State policies for Global Capability Centres West and Central India
Definition in respective States

• Offshore centres established by companies to provide various services to their parent organizations and
group companies widely engaged/working in the IT /ITeS and deep tech sector. These centres operate as
internal organizations within the global corporate structure, providing specialized capabilities in IT/ITeS
and deep tech sector

Gujarat • A minimum GFCI of INR 25 Cr is required for establishing Global In-house Center (GIC) / Global Capability
Center (GCC)

• Additionally, 75% of the operations and functions of the GIC/GCC should be through deep tech and ICT
Technologies

• Centralized units that handle specific business functions for multinational corporations, such as finance,
HR, procurement and analytics and should be wholly owned subsidiaries of multinational corporations
Madhya
Pradesh • Operational scope would include internal back-office operations, shared services and centres of excellence,
R&D but would exclude typical IT and ITES services like software development, BPO, and call centres for
third party clients

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Fiscal Incentives for
GCCs under State
Policies
Incentives offered by State Governments North India
North
West
Indicative summary – North India
Particulars Uttar Pradesh Rajasthan Haryana
• Uttar Pradesh Global Capabilities Centres Policy,
Policy Name • Rajasthan Investment Promotion Scheme 2024 • Haryana IT and ITeS Policy, 2024 (Draft)
2024 (Draft)
Policy Validity • Policy yet to be notified • 31 March 2029 • 5 years from date of notification (yet to be notified)
• Capital Investment > INR 50 Cr/ INR 75 Cr or
• Employment > 1000
Mega Units and Additional conditions • Customization (EFCI >500 cr and employment • Mega (≥ INR 75 - 200 crore)
Negotiations • FDI > 50 Cr specified) • Ultra Mega (≥ INR 1,500 - 6,000 crore)
• Unit or Group company listed in Fortune Global 500 or
Fortune India 500
• Capital Investment > INR 15 Cr/INR 20 Cr or
Minimum requirements • Min FCI - INR 5 crore -
• Employment > 500
• Yes (Gautam Buddha Nagar & Ghaziabad,
Area Classification Pashchimanchal, Madhyanchal, Poorvanchal, - • Yes (Category A, B, C & D)
Bundelkhand)
General Domicile
Condition
• No • No • No
Incentive Specific
Domicile Condition
• Yes • No • Yes
Indicative Ceiling Limit on
Total Incentives
• Not specified, ceiling applicable on each incentive • 100% of EFCI • 100% of FCI
Expansion Unit • 25% increase in existing gross block • Not specified • 50% increase in FCI
Availability of Operational
Guidelines
• Policy not yet notified • Yet to be notified • Policy not yet notified
• 50% Net SGST reimbursement for a period of 5 years,
SGST / Turnover / Capital • 25% Capital subsidy capped at INR 10 Cr/ 25 Cr,or or
• 30% - 50% Capital Subsidy capped at INR 10 Crore
subsidy* • Refund of SGST on Capital goods • 10% Capital Subsidy for unit with min capex of INR 1
crore, subsidy capped at INR 10 crore
• 20% on operating expenses capped at INR 40 Cr / 80
Operating Expense Cr per annum for 5 years (Lease rentals, bandwidth - • Reimbursement of INR 20 per sqft p.m. or 25% of
subsidy/Lease Subsidy exps, data centre/cloud service cost and power actual rent paid for a period of 3 years
charges)

These incentives are indicative in nature and may be subject to further conditions. The actual incentives available will have to be evaluated on a case-by-case basis (based on the size of the project and zonal location within the State)

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Incentives offered by State Governments North India
North
West
Indicative summary – North India
Particulars Uttar Pradesh Rajasthan Haryana
• Reimbursement of 50% of cost of purchase of land or
• 30-50% front end land subsidy on allotment of land lease of floor area capped at INR 1 Cr
Land subsidy from any government agency • 75% Exemption of stamp duty and conversion charges • 30% - 50% stamp duty reimbursement
• 100% stamp duty exemption/reimbursement • 25% Reimbursement of stamp duty and conversion
charges
Electricity duty exemption - • 100% exemption for 7 years • 50% - 75% exemption for 5 years
• 5% on term loan per annum capped at INR 1 crore per -
Interest subvention -
annum per unit for 5 years
• Reimbursement of cost of salaries upto INR 1.2-1.8
lakh per employee per annum capped at INR 20 cr per
year for 3 years
• Reimbursement of INR 20,000 per graduated/post
graduated fresher employee for 5 years
• 100% reimbursement of EPF capped at INR 1 cr for 3
Employment-linked • Employment generation subsidy at INR 48,000 per
years subject to conditions1 -
incentive employee per year for 10 years
• Reimbursement at the rate of 50% of stipend cost
capped at INR 5,000 per student per month for 50
interns per annum for 3 years
• Reimbursement of INR 50,000 per employee for
course fee capped for 500 employees at INR 50 lakh
per annum for 3 years
• R&D grant of 35% of project cost up to INR 1.5 Cr
• 75% reimbursement for obtaining certifications
capped at INR 5 lakh-10 lakh
• Reimbursement of 100% fees for filing patent capped • 25% subsidy on the cost of establishing environmental
Other incentives • 100% reimbursement of patent cost up to INR 25
at INR 5 lakhs for domestic patents and INR 10 lakh projects capped at INR 1 crore
Lakhs
for international patents
• 25% reimbursement of internet bandwidth charges
capped at INR 2.5 lakh p.a. for a period of 3 years

These incentives are indicative in nature and may be subject to further conditions. The actual incentives available will have to be evaluated on a case-by-case basis (based on the size of the project and zonal location within the State)
Notes:
1. This incentive is applicable only to Women/SC/ST/Transgender/Divyangjan employees having UP Domicile

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Incentives offered by State Governments South India
Indicative summary – South India
Particulars Tamil Nadu Karnataka Andhra Pradesh
• Special Scheme to promote Global Capability Centres • Andhra Pradesh Information Technology (IT) and
Policy Name • Karnataka Global Capacity Centre Policy, 2024
(GCCs) in Tamil Nadu Global Capability Centre (GCC) Policy (4.0), 2024
Policy Validity • 31 March 2027 • 18 November 2029 • 11 December 2029
Mega Units and
Negotiations
- • Customisation ( Employment> 1000 - 5000 jobs) • Customisation (> 2000 employment)

• Must be listed in most recent Forbes Global 2000 list

or Fortune 1000 list, exceptions allowed subject to • Current Turnover (> INR 30 Cr per year) or (>=50
Minimum requirements -
approval employees)
• Direct Employment to 200 people
Area Classification - • Yes (Bengaluru and rest of Karnataka) • Not specified
General Domicile Condition - • Not specified • Not specified
Incentive Specific Domicile
Condition
• Yes • Not specified • Not specified
Indicative Ceiling Limit on
Total Incentives
- • Not specified, ceiling applicable on each incentive • Not specified
Expansion Unit - • Expansion Units not defined • Not specified
Availability of Operational
Guidelines
• Not notified • Yet to be notified • Yet to be notified
• Reimbursement of rent expenses based on the
Operating Expense
subsidy/Lease Subsidy
- number of employees capped at 50% up to INR 2 • Rental subsidy of INR 2,000 per seat for 24 months
crore
• Option to switch from Commercial to Industrial power • Industrial Tariff Rates
Power tariff subsidy -
tariffs • Discount of INR 1/unit for 5 years
Electricity duty exemption - • 100% exemption for 5 years -

These incentives are indicative in nature and may be subject to further conditions. The actual incentives available will have to be evaluated on a case-by-case basis (based on the size of the project and zonal location within the State)
Notes:
1. For Karnataka, Units situated in Bengaluru urban district are eligible only for Power Tariff Subsidy and Electricity Duty Exemption

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Incentives offered by State Governments South India
Indicative summary – South India
Particulars Tamil Nadu Karnataka Andhra Pradesh
• Reimbursement of 50% of internship stipend, for a period of maximum 3
Payroll subsidy : months up to INR 5,000/month for 20,000 interns/year
• 30% in Year 1 • 20% of skilling expenses up to INR 36,000 per graduate and INR 18,000
• HRA or Children Education allowance up to 1
Employment-linked • 20% in Year 2 per diploma holder for up to 100 employees or 15% of total workforce
Lakh/employee for 3 years
incentive • 10% in Year 3 • Reimbursement of recruitment costs based on the number of new hires,
For employees having Basic Wages > capped at 50% of the total expenses, up to a maximum of INR 7 crore
1,00,000 per month • Reimbursement of EPF contributions for new employments capped at INR
3000 per employee per month for 2 years
• Funding up to 40% - 75% of capital expenditure up to INR 3 – INR 5 crore
for establishing Innovation Labs/CoEs
• Grants up to 40% capped at INR 50 crore for developing R&D facilities
• Government funding to address public services challenges through
innovative solution capped at INR 1.5 Cr
• One third cost of hosting Events and conferences capped at INR 25 lakh
• 50% reimbursement of domestic patent filing fees capped at INR 2 – INR 3
Other Incentives - lakh -
• Reimbursement of 50% - 80% of Quality certification fees capped at INR 6
– INR 8 lakh
• Reimbursement of 30% property tax for 3 years
• Reimbursement of rent expenses based on the number of employees,
capped at 50% upto INR 2 crore
• Reimbursement of 25% of internet expenses capped at 12 Lakh for 3
years

These incentives are indicative in nature and may be subject to further conditions. The actual incentives available will have to be evaluated on a case-by-case basis (based on the size of the project and zonal location within the State)

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Incentives offered by State Governments West andWest
Central India
Indicative summary – West and Central India

Particulars Gujarat Madhya Pradesh

Policy Name • Gujarat IT/ITeS Policy, 2022 • Madhya Pradesh Global Capability Centres Policy, 2024 (Draft)
Policy Validity • 31 March 2027 • Policy yet to be notified
Mega Units and
Negotiations
• Mega (≥ 250 crore) or (≥ 500 direct employment) • Not specified

• New Unit - Minimum 50 employees on payroll

Minimum requirements • Minimum Capex of INR 15 crore or Minimum employment of 500
• Expansion Unit - Minimum 75 employees on payroll
Area Classification • No • No
General Domicile
Condition
• No • No

Incentive Specific
Domicile Condition
• No • Yes

Indicative Ceiling Limit on

Total Incentives
• 75% of eligible GFCI • Not specified, ceiling applicable on each incentive

Expansion Unit • 50% increase in employees or by 1000 employees, whichever is lower • Not specified
Availability of Operational
Guidelines
• Available • Policy not yet notified

• Capital Subsidy capped at INR 50 crore / INR 200 crore (mega) as follows-
SGST / Turnover / Capital • Up to 20 % of the expenditure made in construction and purchase of the building,
subsidy
• 40% Capex subsidy capped at INR 15 crore / 30 crore
other related fixed assets and
• Up to 30 % of the computers, software, networking related hardware

• 15% of annual eligible opex, capped at INR 20 / INR 40 crores (mega) per year for 5 • Co-working – INR 1500 – 3000 per seat p.m. for 3 years capped at INR 5 to 10 crore,
Operating Expense (Opex) years or
Subsidy/Lease Subsidy • Lease Subsidy - Part of Opex subsidy - No of employees * 60 sq. ft. of built-up area • Rental assistance – INR 500 – 1000 per seat p.m. for 3 years capped at INR 1.5 to 3
per employee * Maximum Monthly rental of INR 50 per sq/ft of built-up area crore

These incentives are indicative in nature and may be subject to further conditions. The actual incentives available will have to be evaluated on a case-by-case basis (based on the size of the project and zonal location within the State)

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Incentives offered by State Governments West andWest
Central India
Indicative summary – West and Central India
Particulars Gujarat Madhya Pradesh
• Rebate on Land upto 75%
Land subsidy - • 100% reimbursement of stamp duty and registration charges for eligible units on
leases executed for a plot in industrial parks developed by Government

Power tariff subsidy • Part of Opex subsidy - Actual expenditure incurred on power/ energy consumed -
Electricity duty
- -
exemption
• Up to 6% on term loans for eligible components, capped at INR 5 crores for 5 years -
Interest subvention -
Construction of building on private or Government land
• Payroll subsidy :
• 50% in Year 1
• 30% in Year 2
• 20% in Year 3
For each employee with salary over ₹ 1 lakh up to 100 employees annually for 3
Employment-linked
- years
incentive

• Skilling reimbursement at the rate of INR 50,000 per employee or 50% of the cost
for 3 years capped at 200 employees per annum only to employees domicile of
Madhya Pradesh

• Part of Opex subsidy – Patent cost of INR 10 lakh per patent (up to 10 patents per • 50% subsidy on cost of quality certification fees capped at INR 6 lakh
year for 5 years) • Patent Cost Reimbursement of up to INR 20 lakhs per domestic patent and INR 30
Other incentives
• Part of Opex subsidy - Total expenditure on Bandwidth and Cloud Rental shall be lakhs per international patent
capped up to 35% of the eligible OPEX or INR 7 crore per annum, whichever is lower • One third cost of hosting events and conferences capped at INR 25 lakh

These incentives are indicative in nature and may be subject to further conditions. The actual incentives available will have to be evaluated on a case-by-case basis (based on the size of the project and zonal location within the State)

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EY Role
Dedicated practice for incentives

Specialized team Advising clients

Policy
The Group is a specialized team aspects The Group advises industry
including experienced talent from associations and companies
ex-government, corporate sector across industries on diverse
and leading industry associations. regulatory and tax policy issues.

• Tax policy
• Indirect (incl. GST)
and Direct Tax
• Trade policy and
Policy changes incentives Engages with stakeholders
• Regulatory policy
The Group anticipates policy • Sectoral Competition The Group engages in
changes and assesses their Political constructive dialogue with
Practical and
impact on business, trade and environment regulatory bodies and
procedural
the broader economy. aspect stakeholders on issues relevant
aspect
to policymakers and businesses.

Highlights

The above investments also

Experience of handling > 250 Partnered with industries to facilitate infused employment generation
projects across India investments > INR 1.5 lakh Cr. > 60,000

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How EY Can Help

Phase 1 Phase 2

Assessment of States Incentives Support with respect to EC

Obtain an understanding of proposed investments Assistance in finalisation of the project report and
contribution analysis statement

Overview and comparison of various incentives Assistance in making representation before the State
available in identified states Authority

Evaluation of benefits (fiscal and non-fiscal) available Assistance in preparation of replies to additional
basis Company’s business and investment plan information requested by the State Authorities

Quantification of potential incentives Assessing projected returns from financial model

Map risks and expected returns related to each option Support with respect to EC

Map negotiation points with Government for possible

customised benefits

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