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Rupee and IT Industry (www.studentcenter.in)

Rupee and IT Industry (www.studentcenter.in)

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Published by Chirag Jain

Presentation Topic: Rupee and IT Industry :To Win Some & Loose Some | For Power Point Presentation (PPT) download & more, visit: www.studentcenter.in

Presentation Topic: Rupee and IT Industry :To Win Some & Loose Some | For Power Point Presentation (PPT) download & more, visit: www.studentcenter.in

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Published by: Chirag Jain on Aug 30, 2009
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05/11/2014

$1.00

USD

Rupee and IT Industry

:
To Win Some & Loose Some

Rupee Appreciation
 Appreciation of Rupee means that there is increase in the value of Rupee in global market or in simple terms rupee has become stronger than before in relation with Dollar.

Rupee Depreciation
• Depreciation of Rupee means that there is reduction in the value of Rupee in global market or the rupee has become weaker than before in relation with Dollar.

Causes of Rupee Appreciation
• Currencies appreciate when the economies are doing well.

• The rupee's appreciation is a result of forces of demand and supply operating in the forex markets.

Causes of Rupee Depreciation
• Market Forces

• Supply and Demand

• Due to falling commodities demand and therefore price, the dollar value is being pushed up.

Graph Showing Exchange Rate of USD into INR

Impact of Appreciation
• Good for Importers.

• Hurts the exporters.

Impact of Depreciation
• Good for Exporters.

• Hurts Importers.

IT Imports-Exports and Rupee Value Impacts on IT

Export of Computer Software / Services Including ITES / BPO

Domestic Software and Services Industry
Production 2005-06 Rs. Cr. Domestic Software for export Total 29600 105000 134600 US$ Mln. 6686.24 23718.09 30404.34 2006-07 Rs. Cr. 37800 146000 183800 US$ Mln. 8739.88 33757.23 42497.11 % Growth Rs. Term 27.70 39.05 36.55 US$ Term 30.71 42.33 39.77

Impact of appreciation on IT Industry
• Impact on Revenue
• Impact on Salaries

• Impact on Recruitments
• Impact on Outsourcing

• Global Competitiveness of IT Sector

Challenges Faced by IT Industry
• dearth of skilled professionals • increasing competition from other countries

(especially China)
• globalization of customers as well as employees

• And a Stronger Rupee.

Solutions
• strong steps by the whole industry acting in concert with the government. • changes in vision and behaviour of management of individual companies. • IT sector needs to find market solutions, rather than hope for a government handholding.

Solutions Cont….
• The sector will have to reduce its dependence on

conventional export markets.
• negotiate their contracts in rupee rather than dollars. • draw in work-force from the border states to bring about superior wage arbitrage. • the sector must be driven more by quality and value than by the softness of the rupee.

What the IT Co’s are doing
• Increase in prices has made a major contribution to maintaining profits. • contracts structured in such a way that the risk of currency movement is shared with the customers. • Co’s have reduce their dependence on the US and

looking at diversifying their business in Europe
and Australia

Continuing: What Co’s Do ?
• (Hedging): IT majors preferring to stay ‘liquid’

Conclusion

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