Which one among the following established the first Global Capability Centre in India?

Correct — C, Texas Instruments. The Economic Survey 2023-24 devotes a box to the journey of global capability centres in India and dates the whole story to one arrival: Texas Instruments setting up its office in Bengaluru in 1985. It was the first time a multinational put a genuine design and engineering operation inside India rather than a sales branch, and the practical difficulty of the moment is part of why it is remembered — the centre had to run a dedicated satellite link to its American headquarters because ordinary Indian telecom of 1985 could not carry the work. Other companies followed through the 1990s, first airlines and technology firms; these offshore arms were called captive centres at the time, then global in-house centres, and only later global capability centres. The scale since then explains why the origin question is worth asking: about 760 such centres were operating out of India in 2012, more than 1,000 by 2016, and over 1,600 as of March 2023, with projections of about 2,100 by 2028. All three of the other companies in the list do run substantial India operations, but each arrived after Texas Instruments had already shown it could be done.

• (a)Honeywell — Honeywell's Indian technology operations are large and long-standing, but they belong to the wave of centres that followed rather than to the 1985 opening the Economic Survey identifies as the beginning.
• (b)Citibank — Citibank was an early mover in Indian back-office work and its offshoring arm later became a well-known business process company, but that is finance-sector processing built in the years after the first design centre, not the origin of the GCC story.
• (d)SAP Labs India — SAP Labs India dates from the late 1990s, more than a decade after Texas Instruments. It is a good example of the second generation of research and development centres, not the first.

A global capability centre is an offshore unit that a multinational owns and staffs itself, rather than a job it contracts out to an Indian services firm. The distinction matters: outsourcing sends work to a vendor, while a capability centre keeps the work in-house and simply moves where the employees sit. The names have shifted over four decades — captive centre, then global in-house centre, now global capability centre — but the model is the same. What has changed is the work. Early centres did back-office processing and maintenance; today they run product development, chip design, analytics and research, and cluster in banking and financial services, software, telecom and semiconductors, with growing presence in aerospace, automotive, oil and gas, healthcare and pharmaceuticals.

This is a pure recall item, and the way to hold it is by the date rather than the company. 1985 sits before liberalisation, before the software export boom, before the internet — which is exactly what makes it memorable, because a chip company choosing Bengaluru in 1985 was doing something no policy was pushing it to do. Anchoring on that year also disposes of the other three options at once: a banking back office and two software or engineering centres of the kind named all belong to the post-1991 world. As of the April 2025 exam India had well over 1,600 such centres, and the sector had become prominent enough for the Union Budget of 1 February 2025 to promise a national framework as guidance to states for promoting such centres in emerging tier-2 cities, so expect the topic to keep recurring with fresher numbers than the ones in this card.

• Texas Instruments set up its office in Bengaluru in 1985, which the Economic Survey 2023-24 identifies as the beginning of India's global capability centre story.
• These units were first called captive centres, then global in-house centres, and are now called global capability centres.
• India housed about 760 such centres in 2012, over 1,000 in 2016 and more than 1,600 as of March 2023.
• A PwC projection cited by the Economic Survey puts the number at about 2,100 by 2028 with a market size of about USD 90 billion.
• A capability centre is owned and staffed by the parent multinational, which is what separates it from outsourcing work to a third-party vendor.
• The strongest verticals are banking and financial services, software, telecom and semiconductors, with growth in aerospace, automotive, oil and gas, healthcare and pharmaceuticals.

• Confusing a capability centre with business process outsourcing; the first is owned by the multinational, the second is a contract with a vendor.
• Assuming the first such centre came after the 1991 reforms. It came in 1985, six years before liberalisation.
• Treating any large multinational India office as a capability centre; a sales or distribution branch is not one.

As a first-mover recall item like this one, or through the numbers — how many centres India hosts, or which sectors dominate. It also appears folded into a services-exports question.

• practice — not a real PYQ

  Which one of the following best distinguishes a Global Capability Centre from business process outsourcing?

  • (a)A capability centre serves only domestic Indian clients
  • (b)A capability centre is owned and staffed by the multinational itself, not contracted to a vendor
  • (c)A capability centre is restricted to manufacturing activity
  • (d)A capability centre may not employ engineers

  Answer(b) A capability centre is owned and staffed by the multinational itself, not contracted to a vendor — which is why these units were originally called captive centres.

• practice — not a real PYQ

  The first offshore design office set up in India by a multinational, in 1985, was located in which one of the following cities?

  • (a)Hyderabad
  • (b)Pune
  • (c)Bengaluru
  • (d)Chennai

  Answer(c) Bengaluru — Texas Instruments opened there in 1985, running a dedicated satellite link to its American headquarters because Indian telecom of the time could not carry the work.