The IT exports and business offshoring industry has a steady association with the US dollar. It's no secret either. The US business contribution to the country's robust industry stands at more than 60 per cent. As the tumbling rupee breached 60/US$ mark, yesterday, the sector applaud the economical cataclysm.
The rupee depreciation comes as a breather for the India's IT/ITes sector- that contributes over 7 per cent to the GDP. The industry, though believes that it would give short-lived respite as majority of contracts negotiated at rupee value, and have longer term.
NASSCOM president Som Mittal, in a statement to CIOL, instead believes that the absolute rate was not a concern for the industry as the volatility continues. "Such sudden fluctuations impact the planning process for companies and customers. We hope to see the rupee stabilizes for better planning and decision making for IT - BPM industry," he said.
"In the past few days, the Indian currency has stirred policymakers as it plunges to an unprecedented low level," Mittal said. NASSCOM however feels that their fundamentals of businesses were strong, and the Indian IT Industry would pass through the current situation of currency volatility and continue to grow.
IT/ITes companies as a part of strategically business mint money in US dollars for leveraging service on Indian soil while it pays back to its employee in Indian currency. Similarly, software exporters too rake in currency at a time when rupee weakens.
These firms are predominantly located in national capital's satellite towns of Noida and Gurgaon, in addition to Bangalore, Mumbai, Hyderabad and Chennai.