Finance Minister Nirmala Sitharaman has said the Centre is working with states to create an enabling ecosystem for global capability centres (GCCs) in India, stressing the need to make smaller cities credible alternatives to metros in attracting multinational corporations.

Speaking at the Confederation of Indian Industry’s GCC business summit in Andhra Pradesh, she underlined the importance of aligning national and state-level policies with each state’s strengths, backed by rising capital expenditure and infrastructure expansion.

The policies also need to be adapted so that each state builds on its unique comparative advantage, the minister said.

GCCs are captive offshore units set up by multilateral corporations in countries such as India to handle key business functions, including technology development, for their global operations.

On India’s potential in this sector, Sitharaman said GCCs have acquired an Indian flavour and the sector’s growth has been consistent with expectations.

The minister also highlighted the need for building infrastructure ecosystems that allow smaller cities to attract global talent and corporate reinvestment and facilitate high-value innovation and service delivery. These steps will help make these cities credible alternatives to the metros, she said.

Sitharaman explained that the central government has been steadily increasing its capital expenditure for building infrastructure and reducing the bottlenecks.

The government’s capital investment has increased from 1.7% of GDP in FY14 to 3.2% in FY25, with effective capital expenditure at 4.1% of GDP. Effective capex includes the Centre’s assistance to states to make capital expenditure.

“Over the last 11 years, 88 airports have been operationalized, 31,000 km of new rail tracks laid, metro networks expanded over fourfold, port capacity doubled and the national highway network has extended by 60%,” the minister said.

The Central government has sanctioned over ₹3.6 trillion as 50-year interest-free loans to states, and incentivized increased capex by the states, the minister said adding that 22 states had recorded more than 10% growth in capital expenditure from their own resources.

Andhra Pradesh chief minister N. Chandrababu Naidu, who was present on the occasion, spoke about making Andhra Pradesh a global hub for knowledge-driven growth.