Navigating GCC Compliance in 2025. What’s New in India, What’s Unchanged, and Why It’s Strategic

Global Capability Centers (GCCs) remain vital to multinational success. But in 2025, compliance has shifted from a support task to a strategic priority. With data laws tightening, tax norms evolving, and AI driving operations, GCC leaders must rethink how they approach regulatory alignment. Those who treat compliance as a value driver—not a bottleneck—will lead in resilience, speed, and scale.

What’s New in 2025?

1. India’s DPDP Act Reshapes Privacy Compliance

The Digital Personal Data Protection (DPDP) Act is India’s first comprehensive privacy law. Its phased rollout mandates stricter data handling, consent collection, and breach notifications, with fines reaching ₹250 crore (~$30M).

GCCs must:

• Appoint data protection officers
• Update processing agreements and vendor contracts
• Localize data or ensure adequacy for cross-border flows
• Confirm user consents and introduce privacy dashboards

Globally, similar trends are emerging. The EU enforces GDPR with greater scrutiny. U.S. states like California and Virginia have passed state-level laws requiring transparency and user control. The UAE and Singapore are tightening data protection mandates as well.

A key concern: DPDP allows data flows only to whitelisted countries. For U.S. companies, this means ensuring that India-to-U.S. transfers meet the evolving adequacy criteria.

2. BEPS 2.0 and Global Tax Reform

The OECD’s BEPS 2.0 introduces a 15% global minimum corporate tax. Companies can no longer rely on profit shifting. If a company falls short of this rate in any jurisdiction, a top-up tax is triggered.

 Action points for GCCs:

• Revisit intercompany service pricing and margins
• Align tax positions with substance and staffing
• Evaluate potential exposure under Pillar Two

Transfer pricing audits are becoming more aggressive. Documentation, benchmarking, and master/local file maintenance are non-negotiable. Even smaller firms—though below Pillar Two thresholds—are feeling this pressure from local authorities.

India is expected to enforce minimum tax alignment by FY25–26, with the Central Board of Direct Taxes already issuing draft positions.

3. State Incentives and Tier-2 Growth

States like Karnataka, Telangana, Tamil Nadu, and Uttar Pradesh are aggressively courting GCC investments. From subsidized land to wage reimbursements, their incentives come with compliance strings.

Key developments:

• Karnataka’s GCC policy aims to double centers by 2029
• Uttar Pradesh’s GCC policy offers 50% capex subsidies for Tier-2 city setups
• Tamil Nadu offers employment-linked benefits for tech centers

This has spurred the rise of “Nano GCCs”—compact 20–100 person pods—in cities like Coimbatore, Indore, and Lucknow. These units bring:

• Cost efficiency
• Talent retention in home cities
• But also: decentralized compliance complexity

Firms must manage multiple state labor codes, shops & establishment rules, and state-specific digital infrastructure regulations.

4. Cybersecurity and AI Regulations

Cybersecurity is now a compliance priority, not just an IT responsibility. India’s updated Digital India Act and CERT-In rules are being enforced strictly.

Requirements for GCCs:

• Maintain a Security Operations Center (SOC) or outsource monitoring
• Adhere to 72-hour breach reporting under DPDP
• Conduct periodic third-party penetration testing
• Maintain audit logs for VPN and cloud traffic

Meanwhile, the EU AI Act is setting the global tone for responsible AI. GCCs building high-risk AI systems (e.g., facial recognition, hiring tools) must:

• Conduct risk assessments
• Ensure explainability
• Avoid discriminatory outputs

The U.S. FTC and India’s NASSCOM have also signalled AI accountability. This means: GCCs must establish internal AI governance boards and model documentation standards.

5. ESG and Sustainability Reporting

ESG mandates are creeping into compliance. While not universally enforced in India yet, global parents are pushing their GCCs to align with:

• GRI (Global Reporting Initiative)
• SASB (Sustainability Accounting Standards Board)
• India’s BRSR (Business Responsibility and Sustainability Report)

Many Tier-1 city GCCs are now reporting on:

• Carbon emissions of operations
• Local supplier diversity metrics
• Social responsibility in hiring and skilling

This isn’t yet a legal requirement for many, but early adopters will benefit as ESG-linked reporting becomes mandatory for large firms and global tenders.

What Hasn’t Changed

Core obligations remain the backbone of lawful operations:

• Entity setup: Proper registration, capital structuring, ROC filings
• Labor compliance: PF, ESI, Shops Act registration, maternity benefits
• Taxation: TDS, GST, income tax returns, Form 3CEB
• Transfer pricing: Benchmarking, intercompany contracts, audit trails
• Governance: Board meetings, statutory books, director duties

Neglecting any of these can void incentives, attract penalties, or damage global reputation.

Compliance as Strategy, Not Support

In 2025, compliance fuels:

• Faster GTM: Clean processes accelerate approvals
• Investor trust: Regulatory readiness signals maturity
• Innovation freedom: With risk managed, teams can focus on outcomes

Compliance is also a differentiator. According to PwC’s 2025 Global Compliance Pulse, 71% of surveyed execs cited compliance as central to their digital transformation success.

Companies that treat it strategically:

• Win public tenders
• Attract better talent
• Secure better financing terms

It’s no longer about staying out of trouble—it’s about unlocking growth.

Proactive Compliance: How to Stay Ahead

1. Monitor Laws Across Jurisdictions

Use local counsel, AI-enabled legal monitoring tools, and trade associations to track laws. Set up a compliance radar function to anticipate changes 6–12 months out.

2. Use RegTech

Adopt GRC tools like VComply, Enate, or MetricStream. Integrate DPDP workflows into HR and product management systems.

3. Empower Local Ownership

Decentralized GCCs need empowered compliance champions. Build regional playbooks and enable city-level leads to execute.

4. Build Privacy and Security by Design

Embed DPDP-compliant logic into every feature. Require AI teams to include fairness and bias testing metrics.

5. Train Continuously

Host quarterly sessions on new laws, including case simulations. Customize by function—HR, finance, engineering.

6. Leverage EOR Partners

In Tier-2 cities, use Employer of Record firms to manage employment compliance while maintaining control of day-to-day work.

7. Run Internal Audits

Conduct quarterly health checks. Use compliance scorecards to identify lagging areas across locations.

Final Word

GCC compliance in 2025 is no longer a box to check—it’s a boardroom topic. Leaders who invest in proactive, tech-enabled, and decentralized compliance will future-proof their India operations.

Those who do this well won’t just comply. They’ll outperform.

Ralent helps U.S. startups and SMBs launch lean, AI-augmented GCC squads in India — with full compliance, talent structuring, and strategic support built in.