India has cemented its position as the world's engineering powerhouse, but choosing how to establish your operations there remains one of the most critical strategic decisions companies face in 2025. Should you build your own Global Capability Center, partner with an Offshore Development Center, or leverage an Employer of Record? Each model offers distinct advantages, and the wrong choice can cost you months of momentum and millions in misallocated resources. As more companies invest in India, understanding the country's potential becomes essential. Our insights on why investing in India highlight this shift.
India's transformation from a back-office destination to a strategic engineering hub didn't happen overnight. The country now produces over 1.5 million engineering graduates annually, with premier institutions like IITs and NITs churning out world-class talent that rivals Silicon Valley's best. Cities like Bengaluru, Hyderabad, and Pune have evolved into thriving tech ecosystems with mature infrastructure, vibrant startup cultures, and a density of specialized talent that few regions can match.
The cost arbitrage remains compelling engineering talent in India costs 60-70% less than equivalent roles in the US or Europe, but the equation has shifted beyond pure cost savings. Companies now recognize India as a source of innovation, product thinking, and 24/7 operational leverage. Major tech giants like Google, Microsoft, and Amazon have expanded their Indian operations from support centers to full-fledged product development hubs, validating India's capabilities at the highest level. To understand why regions like Pune are emerging as engineering hotspots, see our breakdown on why Pune is becoming a global tech talent hub.
The regulatory environment has also matured significantly. The Indian government's push for ease of doing business, combined with established frameworks for intellectual property protection and foreign investment, has reduced traditional friction points. Time zone advantages enable round-the-clock development cycles, and English proficiency eliminates language barriers that complicate operations in other offshore markets.
When companies decide to tap into India's talent pool, they typically evaluate three primary models: Global Capability Centers (GCCs), Offshore Development Centers (ODCs), and Employer of Record (EOR) arrangements. Each represents a different balance of control, investment, and operational complexity.
A GCC is essentially your company's wholly-owned subsidiary in India. You establish a legal entity, build your own team, create your office infrastructure, and maintain complete operational control. Think of it as extending your headquarters into India same culture, same processes, same ownership structure.
GCCs offer maximum control over intellectual property, talent development, and strategic direction. Your Indian team operates as an extension of your core organization, fully integrated into your product roadmap and company culture. Leading tech companies and enterprises with long-term India commitments typically favor this model because it enables deep capability building and protects proprietary technology. For a deeper strategic perspective, explore how GCCs evolve into long-term assets in our article on offshore GCC strategic partnerships.
The investment threshold is significant expect 12-18 months for setup, substantial capital for infrastructure, and dedicated leadership to manage operations. However, for companies planning decade-long India strategies, GCCs deliver the highest ROI and strategic value.
An ODC operates as a hybrid model where a third-party vendor builds and manages a dedicated team for your company. The vendor handles recruitment, HR operations, compliance, and infrastructure, while you retain oversight of project delivery and technical direction.
ODCs provide a middle ground between full ownership and complete outsourcing. You get dedicated resources working exclusively on your projects without the overhead of entity setup and operational management. This model suits companies seeking flexibility you can scale teams up or down based on project needs without long-term infrastructure commitments.
ODCs rely heavily on cultural alignment. We explain why in this guide on cultural alignment for offshore GCC success. The vendor's ability to understand your culture, match your quality standards, and integrate seamlessly with your existing teams determines success or failure. The best ODC partnerships feel like an extension of your team, while poor ones create communication gaps and quality issues.
EOR represents the fastest path to hiring in India without establishing a legal entity. The EOR provider becomes the legal employer of your Indian team members, handling all compliance, payroll, benefits, and HR administration while you manage the day-to-day work.
EOR enables rapid team building you can hire your first Indian employee within weeks instead of months. It's ideal for testing the market, building small specialized teams, or supporting immediate project needs. To see how EOR has evolved for modern teams, explore EOR 2.0 offshore development teams.
However, EOR comes with limitations. You don't build organizational infrastructure, team scalability becomes challenging beyond 20-30 people, and costs per employee run higher than direct employment. Also review why EOR is not enough for global teams as companies scale. EOR works best as a starting point or for companies that need small, specialized teams without broader expansion plans.
Understanding the nuanced differences between these models requires examining multiple dimensions beyond simple cost comparisons.
GCCs carry the highest upfront investment but deliver the lowest per-employee costs at scale. Expect $200K-$500K in setup costs, but once operational, employee costs match market rates without markup. You gain complete financial transparency and control over budget allocation.
ODCs eliminate setup costs but include vendor margins of 15-35% on top of employee salaries. You trade higher per-person costs for operational flexibility and reduced management overhead. The total cost of ownership depends heavily on your scale and longevity ODCs become expensive for large, permanent teams.
EOR offers the lowest entry costs but the highest per-employee expenses, with markups ranging from 20-40%. You're essentially paying for convenience and compliance services. To understand the financial efficiency behind offshoring, explore offshoring vs outsourcing – the smart move (whitepaper).
GCCs require you to navigate Indian labor law, tax regulations, and HR compliance independently. You need dedicated legal and HR expertise, but you control every aspect of employee experience and company policies.
ODCs shift compliance burden to the vendor, reducing your risk exposure. However, you depend on the vendor's compliance infrastructure and reputation. Due diligence on vendor practices becomes critical.
EOR provides the most comprehensive compliance coverage the provider assumes legal employer responsibilities and stays current with regulatory changes. For companies exploring the next stage of remote hiring, our EOR 2.0 offshore engineering framework provides detailed compliance clarity. This makes EOR particularly attractive for companies without international HR expertise.
EOR wins on speed hire your first employees in 2-4 weeks. ODCs follow at 6-12 weeks for team ramp-up. GCCs require 12-18 months for full operational readiness.
However, speed-to-scale tells a different story. GCCs can rapidly expand once established, ODCs scale at the vendor's capacity, and EOR faces practical limits beyond small team sizes. To understand where EOR falls short in scaling contexts, read When EOR stops scaling.
The right model depends on your specific business context, timeline, and strategic priorities.
Select EOR when you need immediate market entry, want to test India operations before committing, or require specialized talent for short-term projects. Startups hiring their first 5-10 Indian employees, companies running pilot programs, or businesses needing niche expertise for specific initiatives benefit most from EOR's speed and simplicity.
For businesses comparing EOR with offshore teams, this guide provides clarity: EOR vs offshore teams. EOR makes sense when reducing time-to-hire outweighs cost considerations and when you're uncertain about long-term India commitment.
ODC suits companies wanting dedicated teams without operational overhead. If you need 20-50 person teams working exclusively on your projects, want to scale up and down based on product cycles, or lack the bandwidth to manage Indian operations directly, ODC provides the right balance.
To understand how ODCs enable faster shipping cycles, review Agile workflows with offshore teams. The vendor handles the operational complexity while you focus on product execution. This works well for mid-stage companies with defined projects but uncertain long-term team size.
GCC becomes the obvious choice when you're building proprietary technology, planning to hire 100+ people, or making a strategic long-term commitment to India. Enterprises with complex IP requirements, companies building their core product in India, or organizations seeking true organizational integration should invest in GCC infrastructure.
For founders scaling global engineering backlogs, From backlog to breakthrough explains why owned teams outperform dependency models. The upfront investment pays dividends through lower per-employee costs, complete control, and the ability to build lasting organizational capabilities.
The traditional build-versus-buy framework has evolved into a more nuanced spectrum. Many successful companies start with EOR or ODC to validate their India strategy, then transition to GCC as they scale. This phased approach reduces initial risk while preserving the option to build owned capabilities later.
Startups especially benefit from hybrid models see how offshoring empowers startups. A startup might use EOR for its first 5 hires, transition to ODC for team growth, and eventually establish a GCC once headcount exceeds 50-75 people. The key is choosing partners who can support this evolution rather than locking you into a single model.
Navigating India's expansion options requires expertise across all three models. Aumni brings deep operational knowledge of Indian markets, proven compliance frameworks, and access to top-tier talent pools across major tech hubs. Whether you're launching your first EOR hire or establishing a 200-person GCC, Aumni's team provides the strategic guidance and operational support to ensure success.
Our expertise spans entity setup, talent acquisition, cultural integration, and ongoing operational management. We've helped dozens of companies successfully scale their Indian operations, avoiding common pitfalls and accelerating time-to-productivity. See how this works in practice in our Aumni case studies.
The decision between GCC, ODC, and EOR isn't just operational, it's strategic. Your choice shapes your cost structure, technical capabilities, and competitive positioning for years to come. The right model aligns with your current stage, resources, and vision for India's role in your global organization.
Book a strategy call with Aumni's India expansion team today. Let's discuss your specific situation and design an India strategy that accelerates your business goals while minimizing risk and complexity.
A GCC is a fully owned entity with maximum control, an ODC provides a dedicated team managed by a vendor, and an EOR enables fast hiring without setting up a legal entity.
For long-term scale and IP-heavy work, GCCs offer the strongest foundation. ODCs work well for mid-size dedicated teams, while EOR is ideal for early-stage or experimental hiring.
EOR enables hiring within 2-4 weeks, ODC setups take 6–12 weeks, and GCCs require 12–18 months to become fully operational.
A transition makes sense when headcount crosses 50–100, IP sensitivity increases, or India becomes central to the product and engineering roadmap.
