West Asia crisis may act as a catalyst for India's office market, GCC investments

When geopolitical crises emerge, like the ongoing West Asia conflict, they disrupt entire supply chain networks, derail energy supplies, slow manufacturing, and ultimately affect economies. But for some sectors, they can act as a catalyst in the years to come, and this is going to be the case with India's office market and Global Capability Centers (GCCs) investments. Experts opine that the current geopolitical crisis may not be the primary growth factor for the sector, but it will definitely accelerate it.

India's commercial office market is riding a boom in demand, as Knight Frank India's latest report showed that office transactions across eight major cities stood at 48 million sq. ft during January-June 2026, only 2% lower than the record high recorded in the corresponding period last year, making it the second-best first-half performance on record.

“India has a deep talent pool, a mature office market, established GCC ecosystems, and competitive operating costs. The current geopolitical environment may therefore reinforce India's attractiveness as part of long-term diversification strategies, although fundamental business considerations continue to drive investment decisions,” Vivek Rathi, National Director-Research, Knight Frank India, told Fortune India.

Analysts say that global occupiers have increasingly been adopting diversified operating models over the past several years, a trend that began with the pandemic and has continued through successive geopolitical disruptions.

“India has emerged as a preferred destination within these strategies, not solely because of geopolitical risks but due to its ability to support large-scale operations across technology, engineering, finance, analytics, and business services,” Rathi added.

The report said new office completions jumped 35% year-on-year to 27.1 million sq. ft, taking India's total office stock past the 1.05 billion sq. ft mark. Even as fresh supply increased, demand remained stronger, with office leasing continuing to outpace new completions. As a result, the national vacancy rate fell to 14.6%, helping rents rise across all major office markets.

GCCs are driving the growth

According to the report, GCCs continued to drive demand, leasing 20.6 million sq. ft during the first half of 2026. This accounted for 43% of total office leasing, the highest share ever recorded for a six-month period. GCC leasing also grew 8% year-on-year, highlighting India's increasing importance as a global hub for technology, engineering, financial services, and healthcare operations.

Experts say the current geopolitical environment is accelerating a conversation that was already underway, not starting a new one, and global occupiers are no longer thinking about India as a single-location bet. They're thinking about it as a resilient base.

“India benefits not only because of its proximity to any conflict, but also because it's one of a few markets globally that can absorb 50,000 to 100,000 net new professional jobs a year without straining talent supply. That absorption capacity is what makes it a diversification destination, and it's what will continue to make it one, long after current crisis-related headlines fade,” Umesh Uttamchandani, Managing Director, Dev Accelerator Ltd, explained.

Beyond the ‘China+1’ strategy

For years, multinational companies have viewed India as a 'China+1' destination, expanding their presence to diversify manufacturing and supply chains beyond China and reduce overdependence on a single market.

Experts said that this trend is now over, and corporate location strategies have evolved beyond the traditional 'China+1' framework into a broader approach focused on supply chain resilience, operational continuity, and geopolitical risk management.

“India's office sector is well positioned to benefit from this evolution because it offers scale, a highly skilled workforce, a mature Grade A office ecosystem, and a proven track record in hosting global capability centres. While diversification decisions remain company-specific, India has strengthened its position as one of the leading destinations for multinational enterprises seeking resilient and future-ready operating models,” Rathi said.

“India’s own commercial real estate is becoming geographically diversified, with credible Grade-A ecosystems in seven or eight cities rather than two or three, which means occupiers can spread risk within India as well,” Uttamchandani added.