Ask the chief financial officer of a Global Capability Centre what it costs to run. The answer begins with people. Salaries and benefits take the largest share of a centre’s annual budget. Rent and technology account for most of the remainder. Plant and machinery barely feature.
That simple fact should shape how Jammu and Kashmir competes for the sector. And that simple fact is what the J&K Government is going to position at the J&K GCC Summit 2026, being organized by Government of J&K and IIM Jammu. A capability centre is a ten-year commitment to recurring cost. The location decision turns on what the centre will cost to run in its fifth and eighth years, discounted to today. The one-time cost of setting up is a minor line in that calculation.
We have 55 investors from the world’s leading Fortune 500 GCC and GCC-enabling companies and India’s leading multinationals descending at IIM Jammu on 9-10 October for the Summit. And each one of them perhaps already knows that a capital subsidy, however generous, only addresses the smallest part of the problem. A subsidy is easy to announce and it makes good PR. But what moves a location decision is sustained relief on recurring cost. That means employment-linked support for each professional hired and retained, a defined share of payroll cost reimbursed for a limited period, lease rental assistance, electricity duty exemption, stamp duty relief on leases and a grant for each candidate trained and placed.
Outcome-linked support also has a fiscal property that capital subsidies lack. Its cost rises only when jobs rise. The exposure of the exchequer is therefore bounded by success and can be budgeted year by year against verified employment. A capital subsidy is paid at the start, whatever happens afterwards. Recovering it from a centre that underperforms is slow and uncertain.
Retention is the second variable. Here Jammu and Kashmir holds a structural advantage. Consider an illustrative centre of 500 professionals. At an annual attrition rate of 20 per cent it must replace 100 people every year. At 10 per cent it replaces 50. Over a decade the difference is 500 replacements, equivalent to rebuilding the entire centre once over. Each replacement carries the cost of recruitment, training and months of reduced productivity.
Professionals who work in Jammu and Kashmir are, for the most part, working where their families live. The pull of a marginally better offer across town, which drives much of the churn in metropolitan clusters, operates with far less force here. Add office, talent and utility costs well below metropolitan levels and the Union Territory has a cost position that rests on its own fundamentals.
The competition is real. At least eight States have notified dedicated GCC policies, from Karnataka, which moved first, to Haryana in May 2026. Tamil Nadu addresses the sector through a dedicated framework and Andhra Pradesh through its IT policy. Their incentive menus vary widely. So do the thresholds at which benefits begin. A Union Territory without an existing GCC base cannot borrow a threshold designed for a mature cluster. It must set thresholds that a first entrant can realistically meet.
J&K’s GCC Policy has been drafted and will be showcased to the prospective GCC multinationals that are attending the J&K GCC Summit. These multinationals will benchmark J&K against the above expected benefits. Be that as it may, we should assess support for the sector in J&K against five rules.
First, pay for outcomes. Support from the J&K Government should be attached to jobs created and sustained, payroll actually paid and candidates actually placed, each verified against EPFO and ESIC records. The exchequer should pay for delivery and only after it.
Second, setting a horizon. Every incentive should reduce over time and end on a known date, so that a centre’s economics is tested on its own profitability rather than continuing purely because of support.
Third, avoid paying twice. A Union Territory instrument should fill the gaps left by Central and Union Territory schemes already in force for industry and skilling, chiefly on operating and lease cost and not vice versa.
Fourth, weigh the return. At an illustrative average salary of ₹10 lakh a year, a centre of 500 professionals pays ₹50 crore in salaries every year, much of it spent locally. It pays stamp duty on its leases. Its local spending and the consumption of its employees generate GST. It supports a comparable number of indirect jobs in facilities, transport and hospitality. For a Union Territory working to strengthen its own revenue base, a sector whose spending stays local is fiscally attractive.
Fifth, publish the ledger. The incentives paid and the jobs verified against them should be disclosed every year. Transparency is the cheapest way to sustain public confidence in industrial incentives.
But then, the caveat is that no incentive can compensate for an unclear approval timeline, a building that is yet to be built or a talent pipeline that falls short of an employer’s requirement. And that is where the J&K Government is ensuring that investors, and not just from the GCC ecosystem, are provided clear approval timelines, assessed and industry-ready talent pool and infrastructure that is plug-and-play ready than bare land.
As I mentioned earlier, the J&K GCC Summit 2026 at IIM Jammu on 9 and 10 October gives the Union Territory a rare opportunity to hear from operators what actually can work for us to be considered as the emerging destination for GCCs. Join the conversation and give us your inputs on what may work. Well, this is a first step, and we hope one that goes a million miles.
