1. The Indian IT-BPO Industry and Latin America
April 2010
Ameet Nivsarkar, Vice President

2. Key topics
• Indian IT-BPO Industry – Trends and Performance
• Looking ahead
• The Latin America experience
2

3. In the face of a global economic slowdown,
the IT-BPO exports industry displayed resilience to grow by
5.5 per cent in FY2010
Indian IT-BPO sector-Export * revenues
(USD billion)
49.7 •India continues to take centre stage in
5.5% – 51% of total sourcing market
47.1
• Industry accounts for 25% of India’s
10.0 exports; 10.5% of services revenues
9.6
• Over 900 captives in India
12.4 accounting for USD 10.6 billion; 650+
11.7 are Engineering design
•Engineering design services and
Product Development clocking USD
10 billion
25.8 27.3 •Transformation, new business
models, driving organization wide
efficiencies
FY09 FY10E
IT Services BPO S/W prod and Engg
* Excluding Hardware
Source: NASSCOM Strategic Review 2010

4. Domestic Market is at an inflection point-
healthy growth of 12% in FY10
Indian IT-BPO Domestic revenues* (INR billion)
662
590 12% •60+ Large transformational deals in
131 telecom, Retail, BFSI, e-governance
123 •BPO continues to be the fastest
108 growing segment at 22%
89 •IT services to grow by 12%
•Government IT spend estimated at INR
150 billion in 2009
•USD 9 billion business opportunity in e-
423 Governance over next 3 years
378
FY09 FY10E
IT Services BPO S/W products
* Excluding Hardware
Source: NASSCOM Strategic Review 2010

5. The industry continues to be an export led sector,
with foreign providers accounting for over 30 percent
of the total market Sourcing model
IT Indian Providers
73.1 Foreign Captives
USD billion Services
79.4 Foreign Providers
62.9
23.0 14
21.9 14
47.9 22.0
72
16.2 BPO
47.5 50.1 30
40.9 50
31.7
20
Engg Design
&Prod Devpt
FY2007 FY2008 FY2009 FY2010E
37
Domestic Exports
55
7
Source: NASSCOM

6. The Industry added 90,000 jobs in FY10
Direct Employment (‘000), FY09-FY10
• Industry directly employs nearly 2.3
4%
2,200 2,290 mn professionals
• Greater efficiencies at play – 4%
500 525 employee growth for 5.5% revenue
growth in exports and 12% in
domestic
738 768
• 70%+ workforce within 18-30 yrs
• Rapidly expanding into Tier 2 / Tier
3 cities – currently operating out of
958 993 45+ locations
• 58% employee workforce
originating from tier 2/3 cities
FY09 FY10E
IT Services exports BPO exports
IT-BPO Domestic
Source: NASSCOM Strategic Review 2010

7. IT-BPO EXPORTS- GEOGRAPHY & VERTICAL
North America continues to be dominant market;
the BFSI segment registered significant uptick in demand
IT-BPO exports by geography, FY2010E IT-BPO exports by Vertical, FY2010E
MPE Const &
RoW Other 2% Utilities T&T
Europe 2% 2% 3% 3%
(exclud
ing UK) APAC Healthc
12% 7% are
4%
BFSI Retail
41% 9%
UK Manufa
18% US
cturing
61%
Hi- 16%
tech/Tel
ecom
20%
100% = USD 49.7billion 100% = USD 49.7bn
•While emerging market grew, North America •Global banking M&A’s have led to significant uptick
continues to be dominant and witnessed increased in demand of IT-BPO services from the BFSI
growth in FY 2010 segment this year
Source: NASSCOM 7

8. Key topics
• Indian IT-BPO Industry – Trends and Performance
• Looking ahead
• The Latin America experience
8

9. INDIA VALUE PROPOSITION
India continues to hold on to its position as the
leading provider of talent at lowest cost
Operating costs per FTE in major offshoring S. AMERICA COMP- 3X
EASTERN EUROPE
destinations relative to India, India=100 COMPETITION- 2X 316
ASIAN COMPETITION- 1.3X
232
211
189
163
121 137
100 105
India Philippines Malaysia China Mexico Romania Hungary Czech Brazil
India Talent Outturn, FY06-10E, 000’ India Talent Outturn Profile, FY10E yr Engg
3
3685 Post
diploma/
3243 3454 Graduate
3000 MCA, 4.2
2936 s, 6.90%
0%
4 yr
Engg, 9.3
2940 3114 0%
2557 2600 2789
Arts, 40.7 Other
0% Graduate
Commerc s, 9.60%
379 400 454 514 571 e Science
Graduate Graduate
FY06 FY07 FY08 FY09 FY10 s, 15.60 s, 13.70
Technical Non Technical % %
Source: NASSCOM, AICTE

10. INDIA VALUE PROPOSITION
Government and private enterprises working
in tandem to create a robust infrastructure ecosystem
Growth in number of STPI units, 2003-09
43 Tier 2/3 cities emerging; reducing pressure on
8,455 leading locations; on an average, 28% costs less than
7,543 7,214 leader cities
5,806 6,321
4,644 4,379
3,544
FY2003 FY2005 FY2007 FY2009
Operating Units Exporting Units
Growth in number of IT SEZs, 2008-10
532
345
303
FY2008 FY2009 FY2010
Source: STPI

11. OUTLOOK-GLOBAL
Going forward, rebound expected in Worldwide
IT-BPO spend
Worldwide IT spending Growth (%)
Worldwide BPO spending Growth (%)
5.6% 12.5%
5.1% 5.5%
7.4%
3.3% 7.0%
3.1% 7.3% 5.9%
2.4%
2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012
December 2009 Forecast
-3.3%
December 2009 Forecast
IT indices, contracted in 2009, showing signs of stabilization, and even some
modest, early signs of recovery in latter part of 2009; Positive 2010 forecasts
Source: IDC

12. Taking a longer term view, global linkages
and irreversible demographic/economic
shifts at play
Macroeconomic and demographic trends
1 Shifting centers of economic activity–GDP of Asia and Europe will converge
2 Working age population shrinking in key developed countries (e.g., Japan, Italy, US)
Social and environmental trends
3 Increased Internet and mobile connectivity transforming the way people live and interact
4 Demand- supply gap in key natural resources creating need for resource efficient
solutions
Business and technology trends
5 Global economic crisis leading to major shift in industry structures and regulatory control
6 Corporate boundaries being redefined
7 Technology radically transforming the way traditional corporations and governments
function

13. Going forward, economic and demographic shifts
may lead to acute talent shortage in the western economies
Regional share of global GDP Comparison of population shifts
Per cent Est. GDP CAGR
Working age (15-60 years) Retiree (60+ years)
Per cent, 1990-2025
100 207 38
Middle East and Africa 4.2 US
Latin America 222 54
90
3.4
Asia (except Japan)
80 40 Actual 9
6.3 workforce UK
41 requirement 13
70
in the US to
Japan 1.4
39 achieve 2.5% 12
60
GDP growth
37 Italy
year-on-year - 14
50
234 mn in
Europe 2.1 55 16
2020
40 Germany
53 18
30
83 27
20 Japan
North America 3.0 75 35
10
750 60
India
0
1990 1995 2000 2005 2010 2015 2020 2025
920 92
2008 2020 Significant shift
Public sector /government-influenced entities will become a priority customer
base, to provide for ageing populations in developed economies

14. The global sourcing industry in India
is likely to reach USD 175 billion, while the domestic outsourcing
industry is expected to reach USD 50 billion in revenues by 2020
Growth multiple
CAGR
India’s technology and business services export s and domestic market – 2020 Projections
EXPORTS, USD billion DOMESTIC, USD billion
50
4.4x 13% 175
4.2x 12.6%
12
40
India global sourcing India global sourcing
market 2008 market 2020
India domestic India domestic
outsourcing market outsourcing market
2008 2020

15. Key topics
• Indian IT-BPO Industry – Trends and Performance
• Looking ahead
• The Latin America experience
15

16. Latin America
• The global crisis and the consequent local resource and credit crunch
have made Latin American importers to look more towards less
expensive sources such as India
• The crisis has opened a new window of opportunity for Indian
companies to create long lasting partnerships
• There is a perceptible change in the mindset of the Latin Americans
towards India.
• The economies of the region have withstood the shock of global crisis
with only moderate adverse impact because of their stronger
macroeconomic fundamentals and resilience.
• The Latin American market has undergone a paradigm shift coming
out of its boom and bust cycles and volatility. It is now set on a
sustainable course of stability and growth.
• It is a large market of 20 countries, 550 million people, 4.4 trillion
dollars of GDP, 8000 dollars per capita income and trade of 1.7 trillion
16
dollars.

17. India and LAC - partnership
Indian presence in LAC
• More then 10 leading firms (IT) already have a presence in LAC or are planning to start
operations in the coming year.
• Indian IT companies are employing over 10000 employees in the LAC region.
• Leveraging local market as well as 12/12 business model
How can Indian IT work with LAC?
• Its proximity with North America, India’s major market.
• Very good near shore option
• Abundance of trainable human resources
• Cost structure that is comparable to India
• Multi lingual capabilities
• Spanish
• Portuguese
• Decent infrastructure
• GDC for serving European markets
• Good markets for some competitive home grown software products (Infy – Finnacle, i-Flex)
Areas of partnership for Indian and firms with LAC companies
• Customize our end products & services as per needs of LAC customers
• Invest in increasing local operations
• Create local ‘brand’ that customers can associate with 17
• Emphasis on having as many locals fill in very many positions

18. Some concerns that need to be
addressed
HR issues
• Business visa & Work permits – have cumbersome & time consuming process. In some cases it
takes 2-3 months of processing time
• Rigid labour laws that lead to increase on cost of employee
• Resourcing – finding right people in new territory
• Training & Development costs
Infrastructure issues
• Simplifying Development Center (DC) set up.
Connectivity
• Coverage across continent
• Expensive
• Time consuming
• Frequent power and water supply issues
Taxation issues
• Withholding taxes
• Totalisation treaty between nations
Cultural issues
18

19. Thank You