Discussion
What has caused Indian IT firms to change the way they conduct business in developing countries?
Answer: B
The closest answer is the demands of these markets are different from those of India's traditional customers.
The passage says Indian firms 'can't compete on price alone' in emerging economies, so to adapt they set up 'major local operations', hire locals, and 'work extra hard to woo business' from companies 'unaccustomed to the concept of outsourcing'. That is a change in how they do business, brought about by the character of these customers and markets, which the key states as different demands.
The other options are not supported. No shortage of capacity is mentioned. Wages are not higher: 'costs in other emerging economies [are] equally low'. And stringent laws are never mentioned. What could not be confirmed is that the passage itself states the cause in the key's words; option B is the best fit among four, not a quotation.
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