Saturday, October 13, 2007

Technology Companies and Depreciating Dollar

Indian Software exporting and Outsourcing companies are the ones which are surely going to suffer due to a depreciating dollar. Their top line and margins are surely going to get thin and profitability going to go down. The companies take recourse to lobbying with the govt. to take steps to stop appreciation of Rupee against the dollar. But the greater good of Indian Technological companies lie in an appreciating Rupee. As it would increase the net purchasing power of the individuals as well as the companies. This will result in an ever improving and alluring domestic market.

The US companies which outsource to the Indian Tech. firms will soon loose the arbitrage enjoyed by the former and result in making outsourcing untenable to the US companies. All in all Indian companies stand to gain relatively more in overall terms compared to the US technological companies. Also the employability of US Technological workers improve as a whole.

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