KPMG and NASSCOM jointly conducted a survey and put it down in their research paper where they pointed on exploring proactive measures GCCs are adopting to address regulatory compliance framework. The report also provides recommendations to aid in navigating the dynamically evolving business landscape in India.
The GCC (Global capability Center) has witnessed the establishment of 1580 center by end of FY2023′. For GCC now it is essential implementing robust compliance frameworks, conducting regular audits and engaging with regulatory authorities for guidance and clarification is paramount.
GCC (Global capability Center) in India is innovating and rapidly scaling up to measure the growing complexity business landscape in India is going to provide in coming times. KPMG and Nasscom surveyed a representative sample of GCC, from across sectors at different stages of their lifecycle to understand challenges and areas of improvement.
Additionally, the paper highlights the strategic initiatives undertaken by the GCC ecosystem, industry leaders, and the Indian government to fuel sustained GCC growth.
The joint survey by KPMG and NASSCOM in India, highlighted top regulations that are key priorities for GCC (Global capability Center).
Regulations & importance of compliance when operating in India
- 81% surveyed okayed for Transfer pricing is a key regulatory priority for Global Capability Centers (GCCs) in India, followed by SEZ and STPI compliance and legislation governing employment practices, including hiring, working conditions and dispute resolution
- For SEZ compliance establishing process for statutory declaration ,development and compliance tracking ,developing SOPs for SEZ specific documentation and regular audits for SEZ specific documentation
- For labour laws implementing internal; controls for background checks, utilizing compliance tools to monitor periodic updates on regional and central regulatory changes.
- 44% stakeholders interviewed expressed concerns that it is important to delayer concerns and concentration ,only 20 % expressed concentrations as perceived risk.
- For Privacy related considerations, designing and implementing privacy policy in line with digital personal data protection act(DPDPA) requirement, performing data mapping, exercises and maintaining record of processing activities along with assessing third party vendors, before on boarding and ensuring privacy by design principles to be implemented
- For corporate TAX and FEMA regulations ,documentations to support foreign tax credit, claims and treaty benefits, assessing access to tax treaty for favorable taxation and validating secondment arrangements are some common practices.
- Other Key Areas of the Report by NASSCOM & KPMG:
- Over 72% of GCC leaders identified talent management as a key priority for GCCs.
- 96% of the interviewed leaders cited adoption and leveraging of emerging technologies (ET) as a crucial priority for achieving sustained growth.
- For the CXOs surveyed, the top 5 regulatory considerations include corporate tax especially transfer pricing, SEZ and STPI
- Compliance, labour laws, DPDPA, and FEMA
- By adopting a variety of metrics, GCCs can accurately identify critical exposures, thoroughly assess potential vulnerabilities, take proactive measures to mitigate the concerns and provide comprehensive reports to global organisations.
“Over the last few years, we have witnessed a remarkable growth of GCCs in India with several factors driving its growth. As GCCs continue their growth trajectory, moving up the maturity curve, with factors such as blurring geographic borders, and technology disruptions, these centres are constantly scanning the dynamic risk landscape and adapting to successfully navigate through,” said Srikanth Srinivasan, Vice President at Nasscom.
