Rupee’s loss is Gurgaon IT-BPO industry’s gain
As the plummeting value of the Indian rupee breached the significant 60-mark recently and sent jitters through markets, the Millennium City’s export-oriented IT and BPO industries have benefitted as their profits are denominated in dollar.Updated: Jul 02, 2013 04:05 IST
As the plummeting value of the Indian rupee breached the significant 60-mark recently and sent jitters through markets, the Millennium City’s export-oriented IT and BPO industries have benefitted as their profits are denominated in dollar.
This has come as a reprieve for the IT and BPO industries which have recorded sluggish growth in recent years amid the rise of alternative outsourcing locations such as China, Philippines, among others.
The overall growth of the sector has gone down to nearly 12% from 20% during its heydays.
“There indeed are gains for the outsourcing industry because of the value of US dollar strengthening against the Indian currency,” said Subinder Khurana, CEO of analytics firm BankSmarts Solutions.
Khurana, who earlier held the post of chairman of the Haryana regional council of Nasscom, however, cautioned that the gains are only short-term and the declining rupee would impact the domestic markets.
“While the input cost will go up, domestic consumers of IT services would also suffer because of weak rupee — both as cost of hardware and input services increases. The weak rupee will also fuel inflation,” he pointed out.
Bhupender Singh, CEO of Britain-based outsourcing giant Serco’s BPO division in Africa, Middle East, Asia and Australia (AMEAA), said, “A weak rupee is favourable for export-oriented industries like BPO.”
He, however, added that such gains are short-term and “any sudden exchange rate movement, either way, is not helpful as one cannot plan for it”.
Industry experts point out that falling rupee also entails losses for the outsourcing business as several firms have a futures contract with clients — negotiated at a lesser rupee value.
Gurgaon, a city which is synonymous with IT and BPO industries, has over 500 such firms working out of here.