Indian IT Firms Expand Focus to LATAM and Africa Markets

03 Sep, 2024

Indian IT Firms Expand Focus to LATAM and Africa Markets

Indian IT firms are diversifying their focus to Latin America (LATAM) and Africa as they seek to reduce reliance on traditional markets like North America and Europe. This shift is driven by various factors, including the desire to tap into new revenue streams and leverage cost efficiencies.

Over two-thirds of revenue for major Indian IT companies such as TCS, HCLTech, and Infosys comes from North America and Europe. However, companies are now exploring LATAM and Africa to broaden their market presence. Nearshore services are becoming increasingly popular as businesses seek locations closer to their clients to enhance communication, collaboration, and alignment across time zones.

Latin America, in particular, offers a growing pool of skilled IT professionals. Countries like Argentina, Brazil, Chile, Colombia, and Mexico have made significant investments in education and technology, resulting in a competitive and proficient workforce. Additionally, wages in these regions are more attractive compared to North America and Europe.

India’s IT firms are also looking into developed regions such as Japan and Australia, as well as areas like the Nordics and Eastern Europe, for outsourcing opportunities. Despite this, developed countries will continue to be core markets due to their substantial IT spending and presence of Fortune 500 enterprises.

The expansion into LATAM and Africa aligns with broader strategic goals. Companies like TCS are pursuing growth in regions such as Asia, India, and Latin America to reach ambitious revenue targets. As Indian IT firms set up delivery centers in Mexico, Vietnam, and Latin America, they are positioned to offer services closer to clients, optimize costs, and capitalize on emerging market opportunities.