Indian IT firms target LATAM, Africa for global expansion
NEW DELHI, INDIA — Indian IT firms are increasingly targeting Latin America (LATAM) and Africa as part of a strategic shift to diversify their business operations beyond North America and Europe.
Analysts highlight that this move is driven by a desire to tap into untapped markets and reduce over-reliance on established regions.
Nearshore services: A growing trend in IT outsourcing
Biswajit Maity, a senior principal analyst at Gartner, said that the concept of nearshoring has gained traction among Indian IT companies.
“From our client interactions over the past year, it’s clear that interest in nearshoring has grown significantly,” he noted, emphasizing the benefits of geographical proximity, which include improved communication, easier collaboration, and better time zone alignment.
These factors are crucial for reducing delays and enhancing business engagement.
LATAM’s emerging IT talent pool
Latin America offers a growing pool of skilled IT professionals, with countries like Argentina, Brazil, Chile, Colombia, and Mexico investing heavily in education and technology.
This has resulted in a workforce increasingly proficient in various IT domains, making the region an attractive destination for Indian IT firms.
“Nearshoring to LATAM or Africa broadens the talent pool and offers cost savings,” Maity added, highlighting the competitive wages and strong capabilities in educational alignment and English language proficiency.
Exploring new outsourcing regions
In addition to LATAM and Africa, Indian IT companies are exploring other developed regions, such as Japan and Australia, the Nordics, and Eastern Europe, for IT service outsourcing.
Pritesh Thakkar from PL Capital- Prabhudas Lilladher noted that while these regions are not primarily targeted for talent acquisition, they offer significant outsourcing opportunities.
“Developed countries like the U.S. and those in Europe will continue to be the core markets,” Thakkar stated, emphasizing the potential for higher realizations in these regions.
Strategic focus on emerging markets
Pareekh Jain, CEO of Pareekh Consulting, highlighted the strategic focus on emerging markets, including India, the Middle East, and Africa. He pointed out that large companies like TCS, aiming to reach $50 billion in revenue by 2030, are increasingly looking at Asia, India, and Latin America for growth.
“Companies will strengthen their presence in North America and Europe, but as they scale, they must explore other geographies,” Jain explained.
Expansion through new centers, acquisitions
Indian IT firms are opening delivery centers in Mexico, Vietnam, and Latin America as part of their expansion strategy. According to Jain, these moves are indicators of both organic and potential inorganic growth through acquisitions.
“These IT companies aim to expand their presence and acquire new customers in LATAM and Africa,” Maity concluded, signaling a continued shift towards these promising regions.
