I would like to point out that exports (mainly IT and BPO) contribute significantly to the GDP of India. Along with a huge pool of English speaking talented people, the main advantage for the american companies is the cost factor. We already have other countries emerging as cost-effective alternatives (like Romania, Russia, Philippenes, Vietnam etc.) Lets take China, China has somehow kept its currency low, as to maintain their cost advantage. No country can dare to beat China on prices. Secondly, the annual salary hikes in India are significantly higher than those in the US and elsewhere. To maintain these hikes, the Indian companies will either have to increase their billing rate, or take lesser profits, or give lesser pay increases. Neither of these bode very well for the IT/BPO professionals. On top of all this, inflation in India is around 10% compared to 4-5% in the US. That would put lot of people in a very bad situation if the rupee were to grow very strong. I think the rupee should be held stable at 40-42 Rs.
RE:undesirable situation...
by Sam on Jun 20, 2007 08:08 AM Permalink
well said, agreed, rupee becoming too strong will create un-desirable speculations, keeping in mind that the infrastructure in India is still at its infancy stages & the government is still as 'clueless' as ever. This may crush India under its own weight.
