India's fifth-largest IT services exporter Tech Mahindra is eyeing business expansion opportunities in Bangladesh, as the IT giant considers it to be a politically stable and growing economy.
The IT services firm – worth $4.9 billion - receives more than 5% of its overall business from India currently, and is looking to create more opportunities in neighbouring markets.
“Bangladesh was one of the most prominent among emerging markets in the Asian region and its technology projects are similar to those in India,” said Sujit Bakshi, the president of India Business at Tech Mahindra.
“Bangladesh’s economy is growing 6-7% consistently for the last couple of years, the currency rate is stable, and there is political stability. That gave us a message that we should focus on investing in that market," Sujit said in an interview with Economic Times.
“If you look at the Indo-Bangladesh relationship, India has been a good friend and they are looking forward to a digital and cashless economy that is independent and balanced at the same time.”
Sujit further stated that apart from banking and financial services, Bangladesh's wide network of inland waterways connected through river ports offers ample scope for tech services.
He also thinks that this sector may need digitization to scale up faster since both freight and passenger transportation systems have historically been dependent on waterways in the country.
"We have won one small deal from a non-bank financial institution (NBFC).
“That is the start, and the funnel is fairly large, and we have met with ten large banks and shipping officials," Sujit said.
The Indian IT services sector, which has traditionally focused on the United States and Europe, has recently started concentrating on India and other emerging markets such as Bangladesh.
“The Indian IT services company will have access to a large talent pool in the country and, unlike the traditional practice, will not resort to labour arbitrage – but rather send leaders from India to train employees there,” the president expressed.
Sanchit Vir Gogia, the chief executive of Greyhound Research said: "Many tech services companies are on the ground. One of the reasons why Bangladesh has woken up to create a strong technology infrastructure is due to the cyber-attacks on their local banks."
Three of the privately run Bangladeshi banks — Dutch Bangla Bank, NCC Bank and Prime Bank — have recently been under seize by cyber-attacks.