The impact of Indian hyperinflation on outsourcing as Rupees plunges– can Indian IT companies and call centers still outshine?
Sudhir Chadda
Jun. 23, 2008

Indian economy faces some serious challenges in the form of fast rising inflation.. Although the inflation started from energy related commodities, it quickly spilled into the food sector making life of common Indians miserable.

The IT and call center sector were facing shortage of human resources for a long time. The emergence of western companies competing with native (desi) companies has caused wage inflation in the outsourcing sector.

Increase in the cost of oil is impacting negatively on the Indian outsourcing industry. However, one sign of encouragement is the falling Rupees. That creates the necessary cushion for Indian outsourcing companies to outshine. This quarter alone, the Indian Rupees has fallen close to 7% and that is adding to the profit and possible rise in salary levels for the Indian companies.

According to some of the international think tanks, Indian stock market will suffer but the outsourcing part especially the IT sector will actually boom.

The negative side is that the American population is wary of India and China dumping goods and services on the American economy and jobs leaving America. The November presidential election in America can determine the final fate of Indian outsourcing. Both McCain and Obama will require Indians and the Chinese to play fair games. The biggest question will be what are those fair games?

The impact of Indian hyperinflation on outsourcing as Rupees plunges– can Indian IT companies and call centers still outshine?
Sudhir Chadda
Indian economy faces some serious challenges in the form of fast rising inflation.. Although the inflation started from energy related commodities, it quickly spilled into the food sector making life of common Indians miserable.
READ MORE>>

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