India or Europe: where should your next team be?

I have built teams and large-scale operations in both India and Europe, including establishing Novo Nordisk’s service centre in Bangalore, now a global business services (GBS) operation with around 4,000 employees, and later Ferring’s service centre in Lisbon, now with around 300 employees.

India or Europe is often one of the first questions companies face when building a team abroad or setting up a centre covering several functions. In my experience, both can work very well, but for different reasons. The trade-offs are not always the ones people expect.

Two very different scales

India’s capability centre industry operates at an enormous scale. About 2,100 global capability centres employed more than 2.36 million people in FY26. (Zinnov and Awfis, August 2026) For context, Poland’s business service centres employed about 488,700 people at the end of Q1 2025. (ABSL, 2025) The definitions and reporting periods differ, but the figures illustrate the scale of the Indian market.

Companies have been building large teams in India for decades, creating established talent pools across many functions. For employers planning a substantial operation, that depth can make a real difference.

Cost: the gap is big, but not the same everywhere

Salaries are the obvious difference. For IT, Indian salaries (national figures) in published 2026 salary guides run roughly 55–70% below the main European cities. For Finance the gap is smaller, roughly 30–60%, and against Lisbon and Porto it is only about a third.

India has a clear salary advantage in these comparisons, but not by the same amount for every Function, and not against every European city. If you are building a Finance team and Portugal is on your list, the difference is smaller than many expect.

Two things narrow the gap over time. Salary increases in India are forecast at around 9% for 2026, against roughly 3–6% in the European countries. And attrition is higher, around 15% compared with 7–10% in most of the European countries we track, so you spend more on replacing and training people. Neither changes the picture completely, but both belong in the business case.

Office rent follows the same pattern. Bengaluru, Hyderabad, Pune and Chennai are well below most European cities. Gurugram is closer to the Polish regional cities than people often assume.

Talent: India is deep, Europe is solid

For IT, four of the five Indian cities we track have a deep talent pool. In Europe it is three of nine: Warsaw, Kraków and Barcelona. For Finance, Bengaluru and Hyderabad stand out, while the European cities we track generally have solid talent pools.

If you need to hire many people in a short time, India’s talent depth is a strong advantage. For a smaller, specialised team, the overall size of the market matters less than whether the city has the specific skills you need.

How the team will actually work with you

This is where the decision is often made, and it rarely shows up in a cost comparison.

English is consistently strong across the European cities. In India it is strong in Bengaluru and Hyderabad, and more varied in the other cities. In practice that matters most for roles with a lot of contact with colleagues or customers in other countries.

Location relative to your headquarters matters too. Time zones matter more than people think. India is 2.5 to 5.5 hours ahead of the European locations we track, depending on the country and season. For a European headquarters that still leaves a good overlap in the morning, but day-to-day collaboration takes more planning than with a team in Kraków or Lisbon. 

During the setup and transition, people travel a lot: managers, process owners, the teams handing over the work. From most European headquarters, a European city is a short flight, and direct flights can make short visits practical. India is a long-haul trip, usually with at least a few nights and more planning. That’s manageable, but it adds cost and time, especially in the first year when you need people on site most. 

For a headquarters in the US, the picture is different again: Europe has the better time zone overlap with the East Coast, while India’s working day barely overlaps with it.

Notice periods also affect how fast you can scale. They vary by country, tenure and contract, so build them into your hiring timeline rather than assuming candidates can start immediately.

Finally, the European cities we track generally score higher on infrastructure and stability. That doesn't make India a risky choice. Plenty of very large operations run there, but it is something to plan for rather than assume.

It doesn't have to be either-or

Many companies end up with both: a larger team in India for scale and cost, and a smaller team in Europe closer to the European business and its customers. Where each part of the work sits depends on the roles, the volume and how closely the team needs to work with the rest of the company.

So which one?

If cost and scale matter most, India is very hard to beat. If close collaboration with a European headquarters, overlapping working hours and frequent visits matter more, Europe often makes more sense. For specialised roles, focus on which city has the skills you need. And the answer can be different for IT than for Finance.

That’s what PlaceKernel’s reports help you assess: which locations fit your team, based on the function and sub-functions you’re building and what matters most to you, across both regions.

Find the right location for your team →

Sources

• Zinnov and Awfis: India GCC industry FY26 (via Free Press Journal, August 2026)
• ABSL: Business Services Sector in Poland 2025