In this brief presentation on 'The Evolution of the IT industry in India and Opportunities for Africa' Sriram Bharatam shares some of the key facts about the evolution of the Indian ICT industry and its growth patterns and key learnings.

1. The evolution of the IT industry in India
and opportunities for Africa
Sriram Bharatam
CEO & Founder, iridiumInteractive Limited
September 2012

2. INDIAN IT-BPO INDUSTRY
Indian IT-BPO industry revenue crosses
USD 100 billion
IT-BPO revenue aggregate1
USD billion
7.5%
7.1% • Total revenue: ~USD 101 billion
6.7% 6.5%
6.4% 69 • Relative to India’s GDP: ~7.5 per
59 cent
47 50 • Relative to merchandise exports:
41 ~25%
32
29 • Value add: 60-70 per cent
22 22 24
• Exports CAGR: 17 per cent for
last 5 years
FY2008 FY2009 FY2010 FY2011 FY2012E
• Domestic CAGR in USD: ~10 per
Exports Domestic Percentage of GDP cent – reflects impact of variable
rupee
Note: 1) Exports (IT services, software products, OSPD, ER&D, BPO, hardware); Domestic (Hardware, IT services (incl. ER&D), S/W products, BPO)
E: Estimate
Source: World Bank, NASSCOM

3. INDIAN IT-BPO INDUSTRY
The industry to provide employment to
about 12mn people in FY2012
FY2012 Estimates
Direct Employment (’000)
(Mn Nos) ~10.2mn
~11.7
2,770
2,540
2,300 601
562
525
876 ~8.9
826
774
1,153 1,295
1,000
Indirect
FY2010 FY2011 FY2012E
~2.8
IT Services exports BPO exports
IT-BPO Domestic
Direct Total Emp
• IT-BPO industry expected to employ around 2.8 million
professionals (growth rate of 9 per cent) in FY 2012
• IT service exports remains the largest employer, with around 47
per cent share of total direct employment
*Excluding Hardware
Source: NASSCOM

4. INDIAN IT-BPO INDUSTRY
Indian IT-BPO exports continues on the
growth path in FY2012
IT-BPO Export revenues*
(USD billion)
68.7 • India’s share in global sourcing - 58 per
16.3% cent in 2011, up from 55 per cent in 2010
59
13.0 • IT services exhibiting fastest growth at 19
per cent, BPO growing by 12.2 per
11.3
cent, and Software Products & ER&D by
15.9
15 per cent
14.2
• Transformation, new business
models, driving organisation wide
efficiencies
39.8
33.5
• Services around disruptive technologies-
cloud, mobility, analytics, social media
• Flexible product portfolios, verticalised
FY2011 FY2012E
solutions
IT Services BPO S/W prod and Engg
Source: NASSCOM * Excluding Hardware

5. INDIAN IT-BPO INDUSTRY
Increasing focus on diversifying into new
geographies and verticals
Industry Geographic break-up, FY2012 Industry Vertical break-up, FY2012
Industry Growth
in emerging
geographies and 21%
verticals ~1.4X
more than
17%
mature
segments
Geographic break-up, Q2FY2012 19.5%
Vertical break-up, Q2FY2012
Revenue (top 10 companies) (top 10 companies)
breakup of top
10 Indian
companies
demonstrates
this
5
Source: NASSCOM

6. Impact of the industry on the
Indian economy
Learnings for Africa

7. Lasting, Sustainable and Phenomenal
contribution over the last decade
Contributing to India’s economy
Driving Balanced Regional Development
Multi-fold
impact on the
Indian Empowering the diverse human assets
Economy
Creating Innovation Platform
Putting India on the Global map
Socially responsible and inclusive

8. Catalysing India’s transformation to a
services-based economy
Indian IT-BPO Industry’s contribution to GDP • Contributes to 10% of
India’s service sector
revenues
6.0%
• Unique “service led”
export oriented model
1.2%
• Contributing 9% of
India’s incremental GDP
FY98 FY09 • Per capita GDP
contribution of IT-BPO
employees ~ 80 times
50% that of agriculture
40% Decline
30%
20% Decline
10% Decline • By 2020, expected
0% Rise 10.0%
to account for
FY02 FY05 FY09 –~10% of India's GDP
Trade, Hotels,Transport & Comm –14% of total
IT-BPO services sector
Community,Social & Personal Services revenues
Financing, Insurance, Real Estate & Business Services

9. 8X increase in direct employment;3X increase
in the share of organized private sector
Direct employees ('000)
~8x
2,200
284
FY00 FY09
Direct employment of 2.7 million; Indirect employment ~8 million
45% of total incremental urban employment in the last decade
By 2020 - Direct employment of 10 million; Indirect employment of 20 million

10. Employment opportunities for diverse
sections of the society
 ~58% of the IT-BPO workforce is from tier
Employment
2/3 cities •Changing aspirations of
beyond
India’s youth
Urban areas  ~ 56% employees are chief bread earners
 ~31% women employees in FY09; account for
•Created high paying jobs
45% of new intake
Bridging the  ~26% of the female employees are chief wage •Setting new standards of
gender divide earners
 ~20% of the female employees are at
work environment
managerial level or above
•Emerging as a “Skill Factory”
 ~74% of employees are less than 30 years
Empowering the old;
youth
 ~35% are less than 25 years of age
By 2020
Livelihood for  ~5% of the IT-BPO workforce from 5 mn women
Economically economically backward sections employees
backward 4 mn direct
employees from
 ~60% of companies provide employment to tier 2/3 locations
Employing the
differently abled people
Differently abled
*NASSCOM Evalueserve survey findings, 7500 participants pan India

11. By 2020, this industry can become a strategic growth
engine for India
Areas Contribution by 2020
IT/BPO industry size
Economy ~10% of annual GDP
US$ billion 18-20% of annual exports
360-375 Employment 30 million employment opportunities (direct
and indirect)
Job creation in rural and non-metro areas -
20-fold increase in the number of employees
operating from tier 2/3 locations
Increased diversity (women are 50% of the
6x total workforce)
Significant global career opportunities due to
location-independent models
Balanced 8-10 satellite townships around Tier-I cities
64
Regional Growth 10-15 Tier-II cities with upgraded basic and
business infrastructure
Reduced fiscal ICT can provide solutions at a fraction of the
2008 2020 burden cost of traditional solutions
potential1 Globally reputed Innovation driving additional GDP
innovative contribution of ~2%
solutions
*Innovation driven growth scenario

12. India and Africa
How can we work for a win-win?

13. India and Africa
India and Africa
• Historically shared friendly ties
Mutual respect
• Healthy trade, but largely dominated by
commodities and natural resources
13

14. African
Closer countries to
Partnership India as a economic and realise their
with African CATALYST of commercial developmental
countries development relations with aspirations in
India can help Information
Technology
14

15. Africa – The Next Billion
• 50+ Countries with a population of 1 billion+
• Fastest growing ICT market worldwide – Growth
50% YOY largely dominated by growth in mobile
phones
• In last 5 years cellular market grew 5000%
(400mn+ Telecom Subscribers); internet grew
630%
• According IDC, Africa's IT market is expected to
be $22.53 billion in 2010
• According to World Bank estimates, Africa
needs over $90 billion per year to build the
infrastructure it needs to support growth and
meet stated development goals.
• High tech business on the agenda of many
African governments which is seen as a catalyst
for development
Source: Avasant

16. Current Trends
Positive Govt. Actions
Increasing
• Democracy
• Economic • Increased spending
targeted towards poverty
Liberalization
Robust Economic alleviation and social growth
• Positive • WB, EU, AfDB providing $70
Growth
Leadership bn + of aid
• Favorable investment • Targeted action focusing
Improved climate governance and education
Optimism • Rising Stock Markets • ICT seen as a key driver to
• Stronger Currencies achieve Millennium
• Falling Interest Rates Development Goals (2015)
Decreasing
• Corruption
• Violence
• Political instability
Huge needs in areas of e-
Govt, Education, Security, H
ealthcare and across private
sectors are driving demand
for ICT in Africa
Source: Avasant

17. Advantage for Indian industry
• Africa has huge unmet ICT demand. Governments
and business that were apprehensive till some time
Right Time back have realized the potential of ICT and are willing
to invest
• Lack of service provider maturity has prevented many
Lesser from outsourcing. Availability of competent providers
Competition can unlock the potential,
• Current deficit of credible Tier II and Tier III players
• Brand India is no.1 in ICT
Brand India • High respect for Indian companies and professionals.
Source: Avasant

18. The Win-Win Opportunity
For African region region
For African India For India
• Access to large pool of • New opportunity across
specialist manpower IT-Services, BPO and
• Use Innovative solutions Engineering Services.
to solve problems • Access to a relatively
• India has many untapped t IT-Services
challenges that are market.
different from Western • Opportunity to leverage
markets, and Indian the strong cultural, trade
companies have devised and historical affinity
solutions that address with India
these challenges • De-risk from over
• SMEs have an dependence on the
opportunity to establish English speaking
themselves in a markets
competitive market
18

19. In conclusion
Demand for IT/BPO services is strong driven by
evolving business models; reducing product /
service life cycles
Verticals in focus for developing the African region
Banking, financi
al Healthcare
E-Governance Education Telecom
services, insuran industry
ce
New models of partnership will have to be created
19
16-Oct-12

20. Thank you