Assessing Market Potential: The GCC as a Strategic Destination for German MNCs

1. 2025 A GCC BUSINESS CASE A GCC BUSINESS CASE F O R G E R M A N M N C s A proposal designed exclusively for German MNCs, presenting a case for establishing Global Capability Centers (GCCs) in India. Providing a deep dive into the unparalleled advantages of India’s GCC ecosystem, focusing on maximizing ROI, leveraging strategic benefits, and outlining a structured roadmap for seamless implementation. www.inductusgcc.com

2. Table of Content 01 Executive Summary 02 Macroeconomic Factors 03 Talent Pool and Workforce 04 Infrastructure and Technology 05 Government Incentives 06 Cost Efficiency and ROI 07 Risk Mitigation 08 Case Studies 09 Conclusion

3. Executive Summary Strategic Advantage for German GCCs The business case outlines the strategic advantages of establishing Global Capability Centers (GCCs) in India for German multinational corporations (MNCs). India’s robust economic growth, skilled workforce, cost efficiency, and favorable business environment make it an ideal destination for GCCs. With a GDP growth rate of 6.5% (2024-25), a young and English-speaking talent pool, and significant government incentives, India offers unparalleled opportunities for German MNCs to optimize costs, enhance innovation, and achieve long-term scalability. Key highlights include: Cost Efficiency:Labor costs in India are 50-70% lower than in Germany, with operational savings of up to €275M over five years for a 500-employee GCC. Talent Pool: India produces 2.5 million STEM graduates annually, ensuring a steady pipeline of skilled professionals in IT, engineering, and AI. Strategic Advantages: India’s time zone (GMT+5:30) enables seamless collaboration with European and U.S. teams, while its cultural compatibility and innovation ecosystem foster global productivity. Government Support:Tax incentives, SEZ benefits, multiple GCC policies of individual state governments, and pro- business reforms (e.g., 15% corporate tax for new units) make India a highly attractive investment destination. Proven Success:German MNCs like Bosch, SAP, Siemens, and BMW have already established thriving GCCs in India, achieving significant cost savings and innovation milestones. The proposal provides a detailed roadmap for setting up GCCs in India, including financial projections, risk mitigation strategies, and implementation plans. By leveraging India’s strengths, German MNCs can achieve 40–60% cost savings, faster time-to-market, and sustainable growth, ensuring a competitive edge in the global market. BUSINESS CASE PAGE 03

4. Macroeconomic Factors India stands as one of the fastest-growing major economies, with a GDP growth rate averaging 6–7% annually over the past decade. According to the IMF, India's GDP growth for FY 2024-25 is projected at 6.5%, outpacing major European and Asian economies. This makes it a ripe environment for setting up a GCC for any German company in India. India’s Economic Growth: Stability and Future Projections Key Drivers of Growth Robust Domestic Consumption: A burgeoning middle class of 400+ million Consumers drive demand. Strong Digital Economy: Digital transactions, AI adoption, and fintech innovations contribute to economic resilience. Manufacturing & Infrastructure Boom: India’s Make in India and Gati Shakti initiatives drive industrial growth and infrastructure expansion. FDI Inflows & Policy Support: India attracted $84 billion in FDI in 2023, making it a global investment hub. BUSINESS CASE PAGE 04

5. Demographics: India’s Workforce as a Strategic Asset India’s demographic advantage is unparalleled, with a median age of 28 years, compared to Germany’s 45 years. This youthful, dynamic, and tech-savvy population fuels business scalability and development centers in India. innovation in offshore Key Workforce Highlights: Skilled Talent Pool: 2.5 million STEM graduates annually, ensuring a steady talent pipeline for GCCs. The third-largest startup ecosystem, fostering a culture of innovation. A growing AI and automation talent base, positioning India as a leader in next-gen tech. English Proficiency: India ranks among the top non-native English- speaking nations, ensuring smooth communication with global teams. Urbanization & Talent Clusters: Bangalore, Hyderabad, Pune, and NCR are tech and innovation hubs, home to 1,800+ existing GCCs. Tier-II cities (Jaipur, Kochi, Indore, Bhubaneswar, etc.) offer cost-effective talent alternatives. Ease of Doing Business: Pro- Business Reforms & India has undertaken landmark economic reforms to enhance its business-friendly environment, significantly improving its Ease of Doing Business ranking from 142nd in 2014 to 63rd in 2020 (World Bank). Incentives Key Government Initiatives Benefiting GCCs: Tax Incentives & SEZ Benefits: Lower corporate tax rate of 15% for new manufacturing units. SEZ benefits, tax exemptions, simplified compliance, and infrastructure support. Digitization of Business Processes: GST & Digital Taxation: Transparent and uniform tax structures. Single-Window approvals for foreign investors. Clearance: Fast-tracked Labor Law Reforms: Consolidation of 29 labor laws into 4 codes, increasing flexibility in hiring and workforce management. BUSINESS CASE PAGE 05

6. Global Competitiveness: India’s Position in Key Indices India’s global rankings highlight its competitiveness in technology, innovation, and business readiness. Index India’s Rank Key Highlights Highest-ranked lower-middle- income country Global Innovation Index (2023) 40th Ease of Doing Business (2020) 63rd Jumped 79 places in 5 years Global Talent Competitiveness Index (2023) Strong growth in tech and digital skills 56th Thriving digital economy and unicorn growth Startup Ecosystem Ranking (2023) 3rd globally Competitive labor costs & policy support Manufacturing Risk Index (2023) 2nd after China Talent Pool India’s Competitive Edge Skilled Workforce: Deep Talent Reserve 2.5 million+ STEM graduates annually, ensuring a steady pipeline of engineers, IT specialists, and AI professionals. World’s second-largest IT talent pool, whose expertise can be leveraged in offshore software development, cybersecurity, and emerging technologies. Multilingual proficiency, enabling seamless global operations with strong English & German fluency and regional language support. BUSINESS CASE PAGE 06

7. Cost Efficiency: Maximizing ROI Upskilling Ecosystem: Future-Ready Workforce Talent costs are up to 50% lower than in Germany and other Western markets. Highly skilled IT professionals at 30-40% of EU salaries, reducing operational expenditure. Lower infrastructure, administrative, and regulatory costs enhance overall efficiency. Strong IT/ITeS ecosystem with 1,800+ GCCs and leading tech firms fostering skill development. Skill India Mission & Digital India initiatives accelerating industry-aligned training. Top-tier institutions (IITs, IIMs, IITs, NITs) are collaborating with industries for cutting- edge R&D and innovation. Infrastructure & Tech Enabling Seamless GCC Operations Smart Cities: Thriving GCC Hubs IT Backbone Infrastructure: World-Class Digital Bangalore, Hyderabad, Pune, and Gurgaon lead as innovation clusters with top-tier infrastructure. Tier-II cities (Jaipur, Coimbatore, Indore, Bhubaneswar) are emerging as cost- effective alternatives. SEZs & IT Parks provide tax benefits, plug- and-play office spaces, and regulatory ease. High-speed ensuring ultra-fast connectivity. Robust data center ecosystem, with global tech giants investing infrastructure. Strong cybersecurity support secure enterprise operations. internet & 5G rollout, in cloud frameworks to Technology Adoption: India at the Forefront of Innovation A Digital-First Business Destination India’s advanced IT infrastructure, smart city ecosystem, and rapid technology adoption make it an ideal hub for German MNCs to establish high-performing GCCs. A global leader in AI, ML, blockchain, and automation, driving transformation. Government-backed initiatives (Digital India, AI Mission) are accelerating tech- driven growth. Thriving startup ecosystem collaborating with enterprises solutions. next-gen digital for cutting-edge BUSINESS CASE PAGE 07

8. Government Policies INDIA offers a range of government policies and incentives designed to attract and support businesses, both domestic and international. Below is an overview of key initiatives: Tax Benefits Special Economic Zones (SEZs): Businesses operating within SEZs enjoy various tax incentives, including: 100% income tax exemption on export income for the first five years. 50% exemption for the subsequent five years. Additional 50% exemption on the reinvested export profit for the next five years. Exemptions from customs duties on imports. Simplified compliance procedures. Production Linked Incentive (PLI) Schemes: The PLI schemes aim to boost domestic manufacturing by providing incentives based on incremental sales. These schemes cover sectors such as electronics, pharmaceuticals, and renewable energy, encouraging both domestic and international companies to establish or expand manufacturing units in India. Key Government Initiatives Ease of Setup Simplified Regulatory Processes: India has implemented several reforms to enhance the ease of doing business: Online Business Streamlined processes allow for quicker incorporation of companies through digital platforms. Goods and Services Tax (GST): The introduction of GST has unified the tax structure, reducing associated with multiple state and central taxes. Single-Window Clearance: This system facilitates expedited various licenses minimizing bureaucratic delays. Make in India: Launched in 2014, this initiative aims to transform India into a global manufacturing hub by: Allowing 100% Foreign Direct Investment (FDI) in numerous sectors. Simplifying licensing processes. Promoting the development of industrial corridors and smart cities to bolster infrastructure. Digital India: This program focuses on enhancing digital infrastructure and services, offering: Promotion of e-governance and digital payments. Increased broadband connectivity across urban and rural areas. Development of smart cities equipped with advanced IT infrastructure. Startup India: Aimed entrepreneurship, this initiative provides: Three-year tax exemptions for eligible startups. Simplified patent filing processes with reduced fees. Access to government-backed funding through a Fund of Funds. Registration: and approval complexities approvals and for permits, at fostering These policies and initiatives collectively create a conducive environment for businesses to establish and expand their operations in India, offering various incentives and support mechanisms to promote growth and innovation.

9. Strategic Advantages 01 Time Zone Advantage: Maximizing Global Productivity Seamless Overlap with European and US Markets Follow-the-Sun Model 24/7 Operations for Business Continuity Germany (GMT+1) – 3.5 to 4.5 hours of overlap, ensuring real- time collaboration teams. United Kingdom (GMT+0) – 4.5 to 5.5 hours of overlap, enabling synchronized decision-making. United States (EST/GMT-5) – India’s workforce can hand off work to US teams at the end of their day, ensuring continuous operations across geographies. Many leverage India for “follow-the- sun” workflows, seamless customer support, IT services, and development cycles. Reduced turnaround times for critical business including finance, HR, and supply chain management. German companies India’s GCCs enable night shifts and flexible workforce models, supporting round-the-clock IT security, customer service, and digital transformation efforts. Disaster recovery sites and redundancy planning in India enhance operational resilience for German firms. with HQ ensuring product functions, different 02 Cultural Compatibility: Deep Business and Diplomatic Ties Strong Historical & Economic Relations Business Synergies & Work Ethic Compatibility Language & Multilingual Workforce Germany trading partner in the EU, with bilateral trade exceeding €30 billion annually. As of June 2024, approximately 2,000 German companies are operating in India, collectively employing around 750,000 local workers. is India’s largest Indian accustomed business practices, structured workflows, assurance, aligning well with Germany’s precision-driven engineering and efficiency- oriented approach. Hierarchical yet work culture ensures smooth alignment with corporate leadership styles. professionals to are English is widely spoken in business facilitating communication. Growing interest in German language training programs in India, with 250,000+ students learning German improving integration German corporate frameworks. Western environments, effective and quality annually, adaptable into German

10. 03 Innovation Ecosystem: India as a Global R&D Powerhouse Collaboration with Startups & Universities Government-Backed R&D Incentives Germany-India Innovation Bridge Bangalore, Hyderabad, and Pune serve as deep-tech innovation hubs with 10,000+ startups. Top institutions like IITs, IIMs, and IIITs actively collaborate with corporations projects. India’s deep-tech and AI startups work with MNCs on robotics, blockchain, and innovations. Corporate tax incentives for in-house R&D centers. 100% FDI technology and sectors. State governments actively support GCC setups, offering subsidies for innovation labs and skill development. Initiatives German Science & Technology Centre (IGSTC) foster joint research in AI, mobility, and smart manufacturing. German firms like Siemens, Bosch, and SAP have already established R&D hubs in India, co-developing solutions for global markets. like the Indo- permitted innovation in on R&D cutting-edge cybersecurity A Strategic Hub for German MNCs With its time zone advantage, cultural adaptability, and thriving innovation ecosystem, India provides a future-proof destination for German MNCs to scale their GCCs. The combination of cost efficiency, continuous operations, and R&D potential makes India a compelling choice for sustainable growth and global competitiveness. BUSINESS CASE PAGE 10

11. Cost Efficiency and ROI Why India Delivers Maximum Value for German MNCs Establishing a Global Capability Center (GCC) in India with top enablers and consulting companies provides unparalleled cost efficiencies, high ROI, and seamless scalability, making it an ideal choice for German multinational corporations (MNCs) seeking long-term operational and financial advantages. 01 Operational Cost Savings: India vs. Germany and Other GCC Hubs Labor Cost Savings: India vs. Germany India’s talent costs are 50–70% lower compared to Germany for equivalent roles in IT, engineering, and back- office functions. A mid-level IT professional in India earns €25,000– €40,000 annually, while in Germany, the same role costs €80,000–€120,000. Senior R&D specialists in India cost 40–50% less than in Germany, with similar skill and expertise. Office Space & Infrastructure Costs Grade A office space in Bangalore, Pune, or Hyderabad costs €1.5–€3 per sq. ft/month, compared to €30–€50 per sq. ft/month in major German cities. Lower operational overheads, including utilities, security, and facility management. BUSINESS PROPOSAL PAGE 02

12. Tax & Regulatory Incentives 15% corporate tax rate for new manufacturing units in India (vs. 29.8% in Germany). Special Economic Zones (SEZs) provide tax holidays, customs duty exemptions, and lower compliance burdens. State-level incentives, including employment-linked subsidies and infrastructure support. Comparison of Key Cost Factors: India vs. Germany vs. Other GCC Hubs India Germany (Berlin/Munich/ Frankfurt) Poland Philippines (Manila/Cebu) Cost Factor (Bangalore/Pune /Hyderabad) (Warsaw/Krako w) IT Salary (Mid- Level, Annual) €80,000 – €120,000 €25,000 – €40,000 €45,000 – €70,000 €30,000 – €50,000 Senior R&D Salary €120,000 – €180,000 €50,000 – €80,000 €75,000 – €110,000 €5,000 – €90,0005 Grade A Office Rent (€/sq. ft/month) €1.5 – €3 €30 – €50 €8 – €12 €4 – €7 15% Corporate Tax Rate 29.8% 19% 25% (for new units) Electricity & Utility Costs (€/kWh) 0.08 – €0.12 €0.30 – €0.35 €0.20 – €0.25 €0.10 – €0.15 Key Takeaway: India offers the lowest operational costs across key parameters, making it a highly cost-effective destination for GCCs compared to Germany, Poland, and the Philippines. BUSINESS CASE PAGE 12

13. 02 ROI Projections: Long-Term Financial Benefits of GCCs in India Cost Savings & Efficiency Gains Over Time Year 1: Initial setup costs including recruitment, office space, and compliance. Years 2-3: Cost optimization, automation-driven efficiencies, and scaling of operations. Years 4-5: Higher innovation output, process maturity, and substantial 40-60% cost savings compared to Germany. Illustrative ROI Model for a 500-Employee GCC in India vs. Germany Financial Metric (Annual) India (Bangalore GCC) Germany (Berlin GCC) Total Employee Cost €20M – €30M €60M – €90M Office Lease & Infrastructure €2M – €3M €12M – €18M Compliance & Taxation €3M – €5M €10M – €15M Total Annual Operational Cost €25M – €38M €80M – €120M Projected 5-Year Savings €275M+ €0 Key Takeaway: A GCC in India can generate €275M+ in savings over five years, delivering 3-4X higher ROI compared to an equivalent setup in Germany. BUSINESS CASE PAGE 13

14. 03 Scalability: Rapid Expansion with Minimal Cost Escalation Talent Availability for Quick Expansion Infrastructure & Real Estate Readiness Scalability Without Exponential Cost Increase India has 5M+ professionals in IT & business services, ensuring an abundant workforce scaling. New hires can be onboarded within 4-8 weeks, compared to 3- 6 months in Germany due to talent shortages. Plug-and-play IT parks across Tier-I and Tier-II cities enable fast scale-ups without heavy CAPEX. Flexible hybrid work models further reduce dependency and costs. Salaries in India rise at an average of 8-12% annually, far below Western wage inflation. Business expansion remains cost-efficient due to lower regulatory burdens proactive government support. for fast real estate optimize and Risk Mitigation Ensuring a Secure and Stable GCC Setup in India For considering India as a Global Capability Center (GCC) hub, mitigating risks related to political stability, legal protection, and cybersecurity is crucial. India offers a secure business environment, frameworks, and advanced data protection measures, making it a highly reliable destination. German multinational corporations (MNCs) strong legal Political and Economic Stability: Political Stability & Business-Friendly Governance World’s Largest Democracy: India has a stable democratic framework with a pro-business government, ensuring policy continuity and predictability. Reform-Oriented Leadership: India has undertaken major economic reforms in taxation, trade policies, and foreign investment to create a globally competitive business environment. Ease of Doing Business Improvements: India has climbed 79 places in the World Bank’s Ease of Doing Business Index since 2014, currently ranking 63rd (out of 190 countries). Bilateral Trade Relations: Strong India-Germany diplomatic and trade relations ensure a favorable regulatory climate for German companies looking to set up GCCs in India. BUSINESS CASE PAGE 14

15. Economic Growth & Stability Fastest-Growing Major Economy: India maintains a 6-7% GDP growth rate, making it the fifth-largest economy globally and projected to reach $10 trillion by 2035. Resilient Against Global Recessions: India’s diverse economy (IT, manufacturing, pharmaceuticals, and services) minimizes risks from global downturns. Strong FDI Inflows: India attracted $85 billion in FDI (2023), ranking among the top 5 global FDI destinations. Currency Stability: The Indian Rupee (INR) remains stable compared to emerging-market currencies, reducing forex risks for German MNCs. Key Takeaway: India provides political certainty, economic resilience, and regulatory stability, ensuring low geopolitical risk for long-term GCC investments. Legal Framework: Strong Protection for Foreign Investors & IP Rights Robust Intellectual Property (IP) Protection Business-Friendly Regulations & Dispute Resolution Taxation & Compliance Safeguards India is TRIPS-compliant under WTO guidelines, ensuring strong IP rights enforcement. 100% FDI Allowed in GCC Sectors: IT, R&D, manufacturing, financial services foreign ownership mandatory local partnerships. GST (Goods & Services Tax) has simplified indirect reducing compliance burdens. and full taxation, allow without Patents Strengthened IPR laws protect software, trademarks, industrial designs. & Copyrights: Advance (APAs) prevent transfer pricing disputes, crucial for German MNCs managing financial transactions. Pricing Agreements and Arbitration & Mediation: India follows the UNCITRAL Model Law on International Arbitration, enabling fast-track dispute resolution. cross-border Commercial German Bilateral Investment Protection Agreements (BIPAs) India and Germany, ensuring dispute resolution safeguards. MNCs benefit from between BUSINESS CASE PAGE 15

16. Cybersecurity: Ensuring Data Protection & Compliance with Global Standards Strong Data Protection Regulations The Digital Personal Data Protection (DPDP) Act, 2023 aligns with GDPR principles, ensuring data privacy compliance for German IT companies and firms. Cross-Border Data Transfers: India allows controlled cross-border data flows under stringent security conditions, preventing unauthorized access. CERT-In Compliance: The Indian Computer Emergency Response Team (CERT-In) mandates breach notifications, threat reporting, and cybersecurity resilience. Advanced Cybersecurity Ecosystem Data Localization & Encryption Standards: India mandates strict encryption policies (256- bit AES encryption) to protect financial, healthcare, and enterprise data. National Cybersecurity Strategy: Government-backed cybersecurity initiatives strengthen digital infrastructure security. Cloud & Digital Security Investments: GCCs in India leverage Tier-4 data centers, cloud security protocols (AWS, Azure, Google Cloud), and AI-driven threat detection. Cybersecurity Risk Management for German MNCs Strict access controls & multi-factor authentication (MFA) reduce unauthorized data breaches. SOC (Security Operations Centers) monitoring for real-time cyber threat detection. Regular security audits & GDPR-compliant data governance ensure adherence to global best practices. Key Takeaway: India provides world-class cybersecurity frameworks, ensuring secure data processing, compliance with GDPR, and protection against cyber threats. India offers stable political governance & strong economic resilience to support long-term business growth. India’s Risk Mitigation Framework for German GCCs Legal protections & investor-friendly policies ensuring IP security, arbitration, and taxation transparency. Robust cybersecurity & data protection laws aligning with GDPR and global compliance standards. For German MNCs, setting up a GCC in India is not just cost- effective but also a risk-mitigated, secure, and future-proof decision. BUSINESS CASE PAGE 16

17. Case Studies and Success Stories German MNCs Thriving with GCCs in India Germany’s corporations (MNCs) have successfully established Global Capability Centers in India, leveraging the advantages, skilled workforce, and strong innovation ecosystem. highlights real-world case studies of Bosch, SAP, Siemens, and BMW, outlining their strategic approaches, operational benefits, and key learnings for German companies planning to set up GCCs in India. leading multinational country’s cost This section Bosch: Scaling R&D and Engineering Innovation in India OVERVIEW STRATEGIC BENEFITS GCC Location: Bangalore, India Advanced R&D Capabilities: Bosch’s Indian GCC plays a crucial role in developing AI-powered automotive solutions, EV technologies, and Industry 4.0 innovations. Key Functions: R&D, engineering services, AI- driven automotive solutions Cost Efficiency: By setting up in India, Bosch reduced its engineering costs by over 40% compared to its German R&D operations. Workforce Strength: 31,500+ employees in India, with 18,000 in R&D Investment: Over €2 billion in India since inception Talent Pool Utilization: India’s STEM workforce and AI specialists have enabled Bosch to scale its autonomous vehicle and IoT projects rapidly. LESSONS LEARNED Leverage India’s startup ecosystem: Bosch partners with Indian deep-tech startups to accelerate product development. Invest in upskilling initiatives: Bosch’s GCC runs internal training programs on AI, IoT, and Industry 4.0 for continued innovation BUSINESS CASE PAGE 17

18. SAP Labs India: A Global Innovation Powerhouse OVERVIEW STRATEGIC BENEFITS GCC Location: Bangalore, Pune, and Gurgaon Cost Optimization: SAP saves 50% in development costs with their offshore software development in India. Key Functions: Software development, cloud computing, AI, ML, and ERP solutions Cloud-First Strategy: India’s SAP GCC leads cloud transformation efforts, enabling SAP to scale its SaaS offerings efficiently. Workforce Strength: 14,000+ employees Contribution: Handles 40% of SAP’s global product engineering Local R&D Synergy: SAP collaborates with Indian universities (IITs, IISc) for cutting-edge AI and blockchain research. LESSONS LEARNED Position India as a strategic technology hub: SAP scaled high-value R&D projects in India, going beyond cost arbitrage. Create a strong leadership pipeline: SAP India nurtures top tech talent for global roles, ensuring seamless cross-border collaboration. Siemens : Driving Smart Manufacturing & Digitalization from India OVERVIEW STRATEGIC BENEFITS GCC Location: Bangalore and Pune Smart Manufacturing & Industry 4.0: Siemens’ GCC in India is responsible for global automation solutions, predictive maintenance, and AI-driven industrial applications. Key Functions: Industrial automation, smart infrastructure, AI-driven manufacturing solutions Scalability & Agility: India’s GCC model allowed Siemens to scale its engineering operations three times faster compared to Germany. Workforce Strength: 12,000+ employees in India Investment: Over €1 billion in India’s smart factory and R&D projects Collaboration with Indian Institutes: Siemens partners with IITs and NASSCOM to develop AI-powered industrial automation solutions. LESSONS LEARNED Use India’s cost advantage to fund advanced R&D: Siemens reinvests savings from India’s GCC into cutting-edge AI and digital twin technologies. Adopt a hybrid innovation model: Siemens integrates local talent with global expertise, ensuring best-in-class solutions. BUSINESS CASE PAGE 18

19. BMW: Engineering Excellence & Digital Transformation from India OVERVIEW STRATEGIC BENEFITS GCC Location: Chennai and Pune Digital-First Automotive R&D: BMW India focuses on AI- driven vehicle diagnostics, automated testing, and digital cockpit solutions. Key Functions: Engineering services, software development, and AI-powered automotive solutions Operational Cost Savings: BMW’s engineering and software development costs in India are 50-60% lower than in Germany. Workforce Strength: 2,000+ employees in India Investment: €500 million in India’s automotive R&D Strong Local Ecosystem: BMW’s GCC collaborates with Tier-1 suppliers and Indian startups to drive innovation LESSONS LEARNED Automate routine tasks for cost efficiency: BMW’s India GCC automates vehicle testing and diagnostics, reducing time-to- market. Leverage India’s AI & analytics capabilities: BMW integrates machine learning models for predictive maintenance and autonomous driving. BUSINESS CASE PAGE 19

20. Cost Savings & Efficiency Gains from India GCCs Key Performance Metric Germany (GCC Model) India Cost Savings (%) (GCC Model) Software Development Cost per Engineer (Annual) €100,000 €40,000 60% Engineering & R&D Costs €120 per hour €50 per hour 58% Time-to-Market for AI/ML Products 18 months 9 months 50% faster Operational Expenses (Facilities, Utilities, Admin) €5 million annually €2 million annually 60% Total Cost of Ownership (TCO) for a GCC €50 million €20 million 60% lower Key Takeaways for German MNCs Significant cost savings: Companies save up to 60% in an offshore software development, engineering, and operational costs. Scalability & agility: India’s GCCs enable faster expansion with a flexible talent pool. Faster innovation cycles: R&D projects in India are completed 50% quicker than in Europe. BUSINESS CASE PAGE 20

21. Why German MNCs Should Follow This Success Path India has emerged as a global hub for high-value GCC operations. German MNCs like Bosch, SAP, Siemens, and BMW have Reduced costs by up to 60% in software development, engineering, and R&D. Scaled their operations efficiently while maintaining high-quality output. Accelerated digital transformation by tapping into India’s AI, cloud, and automation capabilities. In today’s dynamic global landscape, German MNCs must establish GCCs in India to leverage cost efficiency, a vast talent pool, and a pro-business ecosystem. With cutting- edge R&D capabilities, digital transformation expertise, and strategic scalability, India offers an unmatched gateway to sustainable growth and competitive advantage. BUSINESS CASE PAGE 21

22. Comparative Analysis India vs. Other GCC Destinations As multinational corporations (MNCs) explore locations for setting up Global Capability Centers (GCCs), India competes with key alternatives such as Poland, the Philippines, and Mexico. This comparative analysis evaluates these destinations across critical factors like talent availability, cost efficiency, business environment, and infrastructure. Key Comparison Metrics Factor India Poland Philippines Mexico Strong Largest STEM talent pool; 2.14M+ STEM graduates annually Strong IT and engineering workforce, but smaller in size Primarily BPO- focused with limited high-tech expertise manufacturing & engineering base but IT talent is limited Talent Pool Higher labor costs than India but still competitive in Europe Competitive salaries but lower cost savings in high-tech roles 40-60% lower costs than Western markets Higher costs than India but lower than the U.S. Cost Efficiency Strong EU integration, ranked 40th Proximity to U.S. market provides advantages Ease of Doing Business Improving; ranked 63rd globally Business-friendly but bureaucratic Nearshoring incentives; trade agreements with the U.S. Tax breaks, SEZ benefits, PLI schemes EU funding support; corporate tax incentives Special Economic Zones (SEZs) for BPO firms Government Incentives Strong IT infrastructure, Tier-1 and Tier-2 cities well- equipped High-speed internet, strong connectivity to the U.S. Infrastructure & Digital Connectivity BPO-driven; limited tech infrastructure Advanced but smaller market Regional tensions with Russia impact stability Prone to typhoons and natural disasters Political uncertainty and cartel-related risks Stable democracy, investor-friendly Geopolitical Risks BUSINESS CASE PAGE 22

23. Why India Stands Out Key Advantages of India Over Other GCC Destinations Unmatched STEM Talent Pool: India produces 2.14 million STEM graduates annually, significantly outpacing Poland, the Philippines, and Mexico. Superior Cost Efficiency: Indian GCCs offer 40-60% savings in IT and R&D costs compared to Western Europe and North America. Diverse and Mature GCC Ecosystem: India hosts 1,800+ GCCs, spanning software development, AI, analytics, and R&D. Strong Government Support: India provides corporate tax benefits, R&D grants, and SEZ incentives to attract GCC investments. Scalability & Long-Term ROI: With a young, skilled, and English-speaking workforce, India ensures sustainable growth and rapid expansion Implementation Roadmap Feasibility & Strategic Planning 0-3 months Market research, legal setup, location selection Infrastructure & Talent Acquisition 4-9 months Office setup, IT infrastructure, hiring & training key personnel. Operational Kickoff & Scaling 9-18 months Business operations launch, process optimization, regulatory compliance. Maturity & Expansion 18+ months Scaling teams, advanced capabilities (AI, R&D, automation integration)

24. Caselet 5-Year Financial Outlook & ROI Projection Year Key Financial Metrics Operational Milestones Initial Capital Investment: $25M-$30M (Real estate, infrastructure, technology setup, regulatory compliance, and workforce acquisition) - Facility establishment & compliance setup - Core team recruitment (CXOs, leadership, and critical functions) - Technology infrastructure deployment - Vendor onboarding and initial operational ramp-up Year 1 Operating Cost: $18M-$20M per year (HR, IT, administration, and compliance) Cost Savings: 10-15% annually - Process standardization and automation - Economies of scale begin to reduce overheads - Productivity efficiency gains of ~12-15% - Strategic partnerships for cost optimization Year 2-3 Full ROI Realization Projected Cost Savings: 25-30% (Annual operational expenses reduced to $12M-$14M) - Expansion of capabilities & offshore scaling - AI/automation-driven efficiency maximization - EBITDA margin expansion & revenue diversification Year 4-5 Break-even Timeline & Profitability Projections Break-even projected within 2.5 years, driven by: Labor arbitrage yields a 30–40% reduction in operational costs. Technology-driven efficiencies reducing redundancies & optimizing workflows. Scalability factor, ensuring cost-benefit optimization through phased expansion. Vendor consolidation & strategic sourcing, lowering procurement costs by 15-20%. Revenue & Margin Growth Expectations Revenue potential: Estimated to reach $60M-$80M by Year 5 (dependent on industry vertical). EBITDA margins targeted at 20-25% post-stabilization phase. Ongoing cost reductions to sustain long-term profitability with a CAGR of ~12-15%. BUSINESS PROPOSAL PAGE 24

25. Conclusion India stands out as the premier destination for German MNCs to establish GCCs, offering a unique combination of cost efficiency, skilled talent, and strategic advantages. The country’s macroeconomic stability, pro-business reforms, and thriving innovation ecosystem create a conducive environment for long-term growth and operational excellence. Key Recommendations Leverage India’s Cost Advantage: Establish GCCs in Tier-I cities like Bangalore, Hyderabad, or Pune to benefit from lower operational costs and a mature talent ecosystem. Focus on High-Value Functions: Utilize India’s expertise in AI, R&D, and digital transformation to drive innovation and scalability. Adopt a Phased Implementation Plan: Phase 1 (0-3 months): Conduct feasibility studies, select locations, and finalize legal setups. Phase 2 (4-9 months): Set up infrastructure, hire key personnel, and onboard vendors. Phase 3 (9-18 months): Launch operations, optimize processes, and ensure regulatory compliance. Phase 4 (18+ months): Scale teams, integrate advanced capabilities, and maximize ROI. Mitigate Risks: Leverage India’s stable political environment, strong legal frameworks, and cybersecurity measures to ensure a secure GCC setup. Collaborate with Local Ecosystems: Partner with Indian startups, universities, and government initiatives to accelerate innovation and skill development. BUSINESS PROPOSAL PAGE 25

26. Appendices Appendix A: Detailed Cost Breakdown Initial Setup Costs: Real Estate: Estimated cost for Grade A office space in Tier-I cities (e.g., Bangalore, Hyderabad): $1.5-$3 per sq. ft./month. For a 50,000 sq. ft. office, this translates to approximately $75,000 to $150,000 per month or $900,000 to $1,800,000 per year. Technology and Infrastructure: IT infrastructure setup (servers, network, security systems): $5M-$7M Software licenses, cloud services: $1M-$2M Human Resources: Recruitment and initial training costs: $2M - $3M (considering costs for onboarding, training, and initial salary for key roles) Legal and Compliance: Legal fees for company registration, SEZ compliance, etc.: $500K - $1M Miscellaneous (Furniture, Utilities initial setup): $1M-$1.5M Annual Operational Costs (Post-Setup): Salaries: IT professionals: $25,000-$40,000 per annum per employee for mid-level positions; senior roles might range from $50,000 to $80,000. Administrative and support staff: $10,000-$20,000 per annum. Office Maintenance and Utilities: $1M - $1.5M/year Technology Upgrades and Maintenance: $500K - $1M/year Compliance and Legal: $200K - $500K/year Appendix B: Contact Details of Government Bodies For Investment and Business Setup: Invest India: Website: investindia.gov.in Contact: Enquiry form on the website for direct assistance. Department for Promotion of Industry and Internal Trade (DPIIT): Website: dpiit.gov.in Email: enquiry@dpiit.gov.in For SEZs: SEZ Online System: Website: sezindia.nic.in Contact: Through the portal for specific inquiries. Data protection and cybersecurity: Ministry of Electronics and Information Technology (MeitY): Website: meity.gov.in Email: webmanager-meity@gov.in General Business Compliance: Ministry of Corporate Affairs (MCA): Website: mca.gov.in Contact: Available through the MCA portal for company registration and compliance issues. BUSINESS PROPOSAL PAGE 26

27. Glossary Term Definition A centralized hub set up by multinational corporations to manage and execute core business functions like IT, R&D, finance, and HR, often located in countries like India for cost efficiency and talent access. GCC (Global Capability Center) Designated areas in India offering businesses tax concessions, relaxed labor laws, and infrastructure benefits to promote exports, increase foreign investment, and create employment. SEZ (Special Economic Zone) Investment from one country into another, typically involving the establishment of operations or acquisition of tangible assets like stocks or property. FDI (Foreign Direct Investment) A performance measure used to evaluate the efficiency or profitability of an investment, calculated as net profit divided by the cost of the investment. ROI (Return on Investment) The total monetary value of all final goods and services produced within a country's borders in a specific time period. GDP (Gross Domestic Product) An acronym for Science, Technology, Engineering, and Mathematics, referring to an educational policy or curriculum that integrates these disciplines. STEM An initiative by the Indian government to boost domestic manufacturing in strategic sectors by offering incentives on incremental sales over base year turnover. PLI (Production Linked Incentive) Scheme GST (Goods and Services Tax) A uniform tax levied on the supply of goods and services across India, replacing multiple indirect taxes. The simulation of human intelligence processes by computer systems. These processes include learning, reasoning, and self-correction. AI (Artificial Intelligence) A subset of AI that includes the development of algorithms that can recognize patterns, learn from data, and make decisions with minimal human intervention. ML (Machine Learning) The process of creating new products or improving existing ones through investigation and experimentation. R&D (Research and Development) BPO (Business Process Outsourcing) References The contracting of non-primary business activities and functions to a third-party provider. Government Reports: Ministry of Commerce and Industry, India. "Ease of Doing Business in India: A Report on Recent Reforms." moci.gov.in Department for Promotion of Industry and Internal Trade (DPIIT). "Foreign Direct Investment (FDI) Statistics." dpiit.gov.in Reserve Bank of India. "Monthly Bulletin - December 2024." rbi.org.in Industry Studies: NASSCOM. "GCC in India: The Future of Global Capability Centers." nasscom.in Global Indices: World Bank. "Doing Business 2020: Comparing Business Regulation in 190 Economies." worldbank.org World Intellectual Property Organization (WIPO). "Global Innovation Index 2023." wipo.int INSEAD. "The Global Talent Competitiveness Index 2023." insead.edu StartupBlink. "Global Startup Ecosystem Report 2023." startupblink.com Academic Articles: Patel, A., & Kumar, S. (2024). "The Impact of SEZs on India's Economic Growth." Journal of Economic Policy, 78(2), 123-137. Singh, R. (2023). "Demographic Dividend and Its Economic Implications for India." Economic and Political Weekly, 58(15), 45-52. BUSINESS PROPOSAL PAGE 27

28. Inductus GCC Service Models India’s Leading GCC Enabler BOT (Build-Operate-Transfer) A structured pathway to establishing your GCC with minimized risk and maximum efficiency. We build and operationalize your center, ensuring seamless performance before transferring full ownership to you—equipping your business with a mature, self-sustaining capability. COPO (Company-Owned, Partner-Operated) Maintain full ownership while leveraging Inductus’ operational expertise. This model enables you to establish a GCC with absolute control over intellectual assets (IP), agility, and scalability while we manage day-to-day operations, ensuring zero liability, compliance, and maximum efficiency. Additionally, a Zero Capex Model with Digital Twin or a Mirror Like Operational Structure with superior process excellence. FLEXI (Adaptive & Custom GCC Solutions) Beyond predefined structures, Flexi is a bespoke model offering absolute customization and adaptability. It molds itself around your unique business prerequisites, evolving seamlessly with your vision. This isn't just a service—it’s an agile, high-impact partnership crafted to maximize your success. Inductus ensures that each model is executed with precision, innovation, and strategic foresight—helping you unlock the full potential of your GCC in India. Why Inductus? Our deep expertise in GCCs, coupled with a strong network of industry partnerships and policy-level advisory, positions us as a trusted partner for driving transformational outcomes. We help organizations seamlessly navigate their GCC journey—from ideation to execution. Set up your GCC in India with Inductus GCC. Do get more Insights pertainging to what we do Click Here gcc@inductusgroup.com www.indcutusgcc.com +91-92346-92346

29. Digital Twin or Mirror like Operational Structure At Inductus GCC, we implement a 'Digital Twin or Mirror-like Operational Structure' to provide seamless, real-time services to our offshore clients. In this ever-evolving, disruptive global order, where the cost of operations and innovation driven by constant & continuous R&D is the key... companies need to integrate advanced technologies with strategic acumen to remain relevant, unlock potential, and drive sustainable growth. This model creates a virtual representation of physical systems and processes, enabling remote teams operating from different time zones to coordinate and collaborate effortlessly in real-time. It effectively serves as an extension of the central or core team. This efficiencies and supports prompt decision-making. Additionally, it provides advantages such as seamless coordination across multiple time zones and fostering an innovation-driven research and development ecosystem. approach significantly enhances operational Alouk Kumar - CEO, Inductus

30. www.inductusgcc.com