|
|
|
 
 
 
 
|
|
|
|
|
||
|
| ||||
| ||||
| ||||
| ||||
| ||||
|
|
|
Strength in Indian and Chinese currency – the effect may not be that bad for outsourcing companies
India and China are no longer beggar nations. They are actually world’s fastest growing economies with their citizens enjoying fastest growing expendable income. The educated middle class has joined the bandwagon of “American Dream Building with new cars, new homes and a stable family.” The robust prosperity is based on imported jobs though. And now as expected India and China will be asked to make their currency floating in the open market and remove all restrictions on foreign companies participating in their countries.
No matter what happens at the trade levels, Indian and Chinese currencies will revaluate. The valuation of these currencies are estimated anywhere from 20 to 45%. No one knows when this will happen. But they are being pressured to make the change happen fast.
Then what is effect on the outsourcing companies in India after the currency appreciation? Many believe that India and China will lose export-based trade and growth once the currency appreciation takes place.
This may not be true. The currency revaluation will actually boost India Inc.’s outsourcing industry. The employees will be less inclined to leave the country to accept jobs in America or Europe. At the same time, India will pay less for oil. That will drag down the high inflation that is putting heavy pressure on employment cost and overhead cost. The Indian companies are at this moment being squeezed to lower the price. They face serious problems in retaining and expanding the pool of technical talents as well as call center operators. This will stop when the currency gets appreciated.
OUTSOURCING ARTICLES
|
|
| Click here to get ad specs and place your ad or Click here to contact the advertisement department |
Send Letters to the Editor |
Add RSS headlines