Presented By This material was used by

Presented By : This material was used by Data Infocom Limited during an oral presentation; it is not a complete record of the discussion. No part of this document may be circulated, quoted, or reproduced for distribution without prior written approval from Data Infocom Limted, India.

Key Messages • As a rapidly growing market and a key sourcing destination, India is increasingly becoming the center of global commercial interest and economic activity • IT-ITES, a poster-child for the new Indian economy, has grown by 25% (CAGR) over the past decade; exports alone have grown by over 36% (CAGR) over the same period • Sector growth driven by sustained demand, and increasing service line depth and supply-side maturity based on strong fundamentals of abundant talent/skill, quality and service delivery expertise at a sustained cost-value proposition - reflecting India’s growing importance in the new world IT order • The future holds significant opportunity for India – much larger than the aggressive targets set by the industry for itself; key stakeholders are undertaking several initiatives to ensure that Indian IT-ITES achieves its full potential

India is not just a land of mystics and wonders… • India’s GDP has grown at nearly twice the global rate over past 20 years • Steady annual growth in real GDP, industrial production and domestic demand of 5 -6% • Sustained real growth in foreign investment inflows (FDI and FII) since economic liberalization (1991) • Cumulative forex reserves of ~USD 140 bn Source: JM Morgan Stanley FY 06 GDP Growth in India is Amongst the Fastest in the Region Source: Citigroup

…but a growing economic superpower Organisation for Economic Co-operation and Development

A maturing economy led by high growth in services… • Over the last decade the Indian economy has transitioned from an agrarian economy to a predominantly services based economy • Key services sectors – Personal services, trade, hotels, banking, communications and business services

Progressive liberalization and increasing investor confidence… Sector FDI / FII Limit* Insurance 26% Civil Aviation 49% Private Banking 49% NBFCs 49% Trading 49% Telecom 74% IT-ITES 100% Power (excl. atomic power) 100% Hotel & Tourism 100% Drugs and Pharma Mfg. 100% Infrastructure (roads, highways, ports, harbors) 100% * Automatic approval Source: Websites of Rating Agencies

Indian IT-ITES sector estimated to grow by 28% and account for 4. 6 -4. 8%* of GDP in FY 06 USD Billion Share of GDP 4. 6 -4. 8% • Indian IT-ITES sector revenue to exceed USD 36 bn in FY 06 – growing at a CAGR of over 25 percent over the past decade • Exports account for nearly twothirds of the total – growing at a CAGR of over 36 percent over the past decade • Industry employment to reach 1, 287, 000 – a net addition of over 1 million employees over the past six years alone 4. 1% 3. 5% 3. 2% 2. 9% 2. 7% 1. 9% 1. 5% 1. 2% Source: NASSCOM * Proportion of GDP denoted as a range after FY 06 GDP revised upwards by CSO

Growth driven by service line depth, … USD Billion • • Emerging service lines such as infrastructure outsourcing, software testing, etc. , in IT outsourcing • Analytics, research and functional outsourcing (F&A, CIS and HR) in ITES-BPO gained greater visibility • Source: NASSCOM Demand for traditional services remained strong Engineering and R&D services emerged as an independent segment

…increasing supply-side maturity…

IT services exports lead, accounting for 35% of the total, growing at 32 -33% (FY 06 E) Source: NASSCOM

ITES-BPO exports* to grow by 37%, estimated to reach USD 6. 3 bn (FY 06 E) * Reclassified to exclude services now included under engineering and R&D Source: NASSCOM

Engineering and R&D, software products hold significant opportunity for India – growing at 43% and 25% (CAGR FY 2003 -06 E), respectively Leading prodoucts : Tally, Ebiz, Spamjadoo, Xgen, Finacle Source: NASSCOM

Positive outlook for Indian IT-ITES; industry set to achieve targets for 2010 USD Billion CAGR 26 -27% CAGR 24 -25% 14 -15 * Estimates for software and services only. Does not include estimates for hardware. Source: NASSCOM 60+

As global delivery matures, newer locations are emerging; however India remains the undisputed leader • India maintains its distinctive lead amongst offshore destinations • Strong fundamentals will help sustain India’s value proposition – 28% of the suitable talent available across all offshore locations (outranks the next destination by a factor of 2. 5) – Keen emphasis on security and quality – Sustained cost competitiveness, gains from increased productivity, utilization and scale expansion • Key initiatives underway to strengthen India’s value proposition

India’s pillars of success – You can use this opportunity. • Access to a large, growing pool of highly qualified talent • A high degree of quality orientation and demonstrated service delivery expertise • Keen emphasis on information security reflected in the comprehensive legal framework and elaborate security practices supplemented by enabling intervention • World class telecommunication infrastructure • International standards in real estate and office facilities • Enabling (and progressively improving) business environment through strong government support; incentives, favorable regulations and policy …delivered at a sustained and compelling cost-value proposition

Five key areas that India is focused on, to sustain its lead • Enhancing the talent pool advantage – focus on skill development to better leverage the worlds largest working population • Strengthening urban infrastructure in existing and emerging cities and emphasis on proactive regulatory reform to facilitate greater ease of doing business • Driving a philosophy of operational excellence amongst industry players to ensure that India based delivery sustains world leading benchmarks in performance • Catalyzing domestic market development • Actively promoting an uncompromised agenda towards global free trade

Jai Hind Dr. Ajay Data, CEO, Data Infocom Limited , INDIA akd. ibsa@dil. in