Egypt appears to be the new destination for Indian IT firms planning to expand their geographical presence. The Egyptian information and communications technology (ICT) segment, which has maintained a 20 per cent growth rate and attracted local and foreign investments of more than $8 billion over the past three years, is attracting investments from Indian companies including Infosys, IBM Daksh and Firstsource to have global delivery centres in Egypt.
Another three leading Indian outsourcing companies are reportedly conducting due diligence in Egypt and would soon set up delivery centres with capacity to house up to 2,000-5,000 people. Tata Consultancy Services (TCS), according to sources close to the matter, is evaluating a delivery centre in Egypt, possibly starting with 100-300 people centre this year. A TCS spokesperson, when contacted, said, "We do not comment on market speculations." Wipro and Satyam, which already have delivery centres in Egypt are also expected to ramp up their headcounts.
Egypt's Information Technology Industry Development Agency (ITIDA) representatives informed, "We are building a software technology park, keeping in mind the Indian BPO companies that have expressed their interests in setting shops in our country."
ITIDA officials were in India to attend the Nasscom Leadership Summit and have been making an aggressive pitch to attract companies from India's IT-BPO industry and outsourcing the outsourced to Egypt. Amin Khaireldin, a member and advisor of strategies to the board of directors of ITIDA said, "Outsourcing to Egypt is 20 per cent cheaper than other West Asian destinations. For Indian companies, which are fast losing their cost advantage, having a delivery centre in Egypt would be a strategic move to service European and West Asian markets."
Indian companies are also actively participating with the Egyptian government in training university graduates to acquire the proper set of skills needed to work in the BPO industry. Egypt has already added new curriculums across six of its universities to produce job-ready graduates.
Khaireldin said, "Companies like McKinsey, Haworth along with ITIDA have been formulating IT curriculums for colleges creating a large pool of graduates of over 330,000 annually, which includes a strong 31,000 potential specialist workforce with engineering and computing degree."
More From This Section
ITIDA has also signed a Memorandum of Understanding (MoU) with Nasscom to cement bilateral ICT relations between the countries and letters of intent have been signed with three of India's top five IT-BPO companies demonstrating Egypt's keen interest in partnering with India. "This MoU takes forward the business relationship where Egypt supplements the Indian counterparts," remarked Khaireldin.
ITIDA stated that the Indian FDI in Egypt stands at $800 million and is distributed over 200 Egyptian companies.