Your own company in India, an employer of record that hires for you, or a vendor that supplies the team. We ran all three through the same cost model and looked at what changes when the team builds AI.
You want engineers in India to build your AI product. There are three common ways to do it. You can set up your own Indian company, often called a global capability center or GCC. You can use an employer of record (EOR), which hires people for you under its own company. Or you can hire a vendor that supplies a team.
Most comparisons of these models are written by firms that sell one of them. We sell AI engineering work, so we have a bias too. To keep it honest, this post runs all three models through one public cost model, shows the numbers, and says where each one wins.
We used the base case of our India team cost calculator with a balanced mix of junior, mid and senior engineers. Its main assumptions: India salaries of $15K, $28K and $45K a year, 20% on top for statutory costs and benefits, and 10% extra headcount for the same output. A GCC costs $120K plus $9K per engineer to set up, then 12% on top for leadership and admin. The EOR fee is $200 per person per month. The vendor adds a 35% margin. These are our planning assumptions, not market data, and every one of them can be changed in the calculator.
Three things stand out.
So on cost alone, the case for a GCC is weaker than many guides suggest. The real reasons to build one are about control, and AI work makes those reasons stronger.
An AI team produces more than code. It makes training datasets, labels, evaluation sets, prompts, fine-tuned model weights and the pipelines that build them. In a GCC, your own company employs the people, so ownership is simple. With an EOR, the employment contract is between the EOR and the engineer, so check that it assigns all work product, including models and data, to you. With a vendor, the contract decides everything. Read the IP clause line by line and name model weights and datasets in it.
AI engineers often need real data: patient records, contracts, invoices, support tickets. You will want them on your own laptops, accounts and access controls. That is easy in a GCC and usually possible with an EOR, since you direct the work. With a vendor, people often work inside the vendor's systems unless you insist otherwise, and your security review gets harder.
Many AI projects start with three to eight senior people. That is too small to justify GCC setup costs. An EOR or a vendor fits better at that size, and you can revisit the choice once the product proves itself.
An engineer who has spent a year on your data knows its quirks. Losing them hurts more in AI than in most software. A vendor can move people between clients. Your own GCC or EOR staff are yours to keep, if you pay and treat them well.
India's four labour codes came into effect on 21 November 2025, replacing 29 older labour laws (PIB press release). Two changes matter for team budgets. "Wages" now has one definition, under which basic pay must be at least half of total pay, and provident fund and gratuity are worked out on that wage. Fixed-term employees also become eligible for gratuity after one year instead of five.
In a GCC you carry these costs directly. An EOR passes them on to you, and a vendor builds them into its rates. Detailed central and state rules were still being finalised through 2026, so check the current position with a payroll or legal adviser before you budget.
| Your situation | Usually the better fit |
|---|---|
| Under about 10 people, or testing India for a year or two | Employer of record |
| No engineering manager of your own, fixed scope, need output fast | Vendor |
| 25 or more people, core IP, planning to stay 5 years or more | Your own GCC |
| Somewhere in between | Start with an EOR or vendor, and agree up front how staff can move to your own company later |
The last row has a name in the industry: build, operate, transfer. A partner builds and runs the team, and you take it over later. If you go this way, agree the transfer terms and any fees in the first contract, not at the end.
Innometrique is an AI engineering firm in Bengaluru, founded in 2025. We are not a legal, tax or payroll adviser, and nothing here is legal advice. Since 2023, the founder has been building and operating an 80-person GCC in India for a European SportsTech company. That work is delivered through a different company from Innometrique, and the founder track record page has the detail.
To test your own numbers, use the India team cost calculator. If you are still sizing the project itself, the AI project cost estimator and the AI readiness assessment show every assumption they use.
Tell us your team size, timeline and what the team will build. We will walk through the three models with your numbers and tell you plainly which one we would pick.
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