The artcile made for an interesting read. But I wonder if a rising Rupee will mitigate cost advantages in the IT/ITES sectors resulting in lesser work coming to India. But I believe having established a global reputation of possessing a great tech talent pool, I think IT work will continue to come in. The same applies to the fledgling manufacturing sector which is expected to grow rapidly. But on a macroeconomic level, I guess the demographics are favorable and therefore domestic consumption will ensure a robust economic growth in the years to come.
RE:Interesting Read and a few queries
by yajuvender chauhan on Jun 27, 2007 12:20 AM Permalink
The artical is worth reading. Falling dollar is a good sign in the short run & its the evidence that the domestic economy is growing in real terms & not a myth anymore. The exports has definitely taken a hit but not to forget here that the smart exporters must already be having forward currency contracts saving them from disgrace in the short run. In the long run since imports will become cheaper the exporters will definitely go for improved methods of productions thereby reducing their costs & improving overall product competetiveness. The domestic consumption is growing that means foreign investment will continue to come in to support increased demand that would also mean the interest rates will be stabilized over a period of time. Another thing to consider here is the fact that USD is falling against every other currency & not just rupee so the offshoring jobs will continue to flow in. As per the deloitt study China can be a threat to offshoring to India but no less than 10 years by that time India would already built up the infrastructure that will suit other dimensions of business. This is a start India need to build on to make a huge gain.
