The short answer
A GCC in India costs roughly USD 30,000 to 45,000 per engineer per year fully loaded in a tier-one city, and USD 17,000 to 24,000 per operations role. Salary is about 70% of that; the rest is statutory benefits, workspace, IT, recruitment and compliance. One-time setup for a wholly owned subsidiary typically runs USD 120,000 to 250,000. Net savings against a US-based team usually land between 55% and 70% once everything is counted.
The run-rate, decomposed
Business cases fail internal scrutiny because they model salary and treat everything else as a rounding error. For a mid-level engineer in a tier-one Indian city, here is roughly where the money goes.
| Line | Annual USD | Share | Notes |
|---|---|---|---|
| Base salary | $22,000–30,000 | ~62% | Varies most by city and seniority |
| Variable pay and bonus | $2,200–3,600 | ~7% | Typically 10–12% of base |
| Statutory benefits | $2,600–3,600 | ~8% | Provident Fund, gratuity accrual, insurance |
| Workspace and facilities | $1,800–3,000 | ~6% | Managed seats cost more per head but flex |
| IT, devices and software | $1,500–2,400 | ~5% | Amortised laptop, licences, network, security |
| Recruitment, amortised | $1,200–2,200 | ~5% | Rises sharply with attrition |
| Compliance, legal and audit | $800–1,400 | ~3% | Allocated across headcount; fixed in absolute terms |
| Management and G&A overhead | $1,400–2,600 | ~4% | Site leadership, HR, finance, admin |
One-time costs most cases miss
- Incorporation and registrations: USD 8,000 to 20,000 including legal, apostille and filing fees
- Leadership search: USD 25,000 to 60,000 for a site leader and one or two functional heads
- Fit-out, if you take a dedicated floor: USD 900 to 1,800 per seat, plus a security deposit of six to twelve months’ rent
- Security and audit readiness: USD 15,000 to 50,000 depending on your certification requirements
- Parallel running: the period where both the existing team and the new one are paid. Often the largest single one-time cost and almost always omitted
- Travel and knowledge transfer: budget for your people to spend real time on site in the first two quarters. Skipping this is a false economy
How attrition changes the arithmetic
Attrition is not an HR metric; it is a cost line. At 20% annual attrition on a 100-person centre, you are replacing 20 people a year. Each replacement carries a recruitment cost, a ramp period during which productivity is partial, and a knowledge loss that is real but hard to price.
Practically: a city with 22% attrition and 8% lower salaries can be more expensive than a city with 13% attrition at the higher rate, once you account for productive capacity rather than headcount. This is the single strongest argument for choosing a city on talent stability rather than salary level, and it is why Chennai and Pune often beat their cost ranking.
What the savings actually look like
Against a US baseline, a fully loaded India engineer at USD 38,000 compares with roughly USD 160,000 to 180,000 for an equivalent profile — a gross gap around 77%. Net of the governance overhead, travel, parallel running and the productivity discount during ramp, most programmes realise 55% to 70% in the first two years, improving as the centre matures.
Against a UK or Western European baseline, expect 50% to 65%. Against Australia, similar. Model it honestly. A business case promising 80% savings sets up a conversation in year two that nobody enjoys.
Where cost goes wrong
- Seniority drift. You budgeted for mid-level engineers and hired senior ones because the mid-level market was competitive. This is the most common overrun.
- Real estate committed too early. A nine-year lease signed at month two for a headcount you reach at month thirty.
- Compliance treated as variable. It is largely fixed, which means it is punishing at 20 people and negligible at 200.
- Counter-offers. Budget for a 10% to 15% premium on offers in hot skill areas or accept a longer time-to-fill.
- Unmodelled leadership layer. A 100-person centre needs a site leader, an HR lead, a finance lead and engineering managers. That layer costs real money.