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Strong Re may dent IT export earnings in H1: Nasscom
August 04, 2003 18:19 IST
The rising value of rupee against the US dollar is likely to make a two to three per cent dent in export earnings of Indian software companies in the first half of the current fiscal, National Association of Software and Service Companies said on Monday.
"If the current appreciation in rupee due to foreign exchange inflows continues, it might affect Indian software export earnings," Nasscom president Kiran Karnik told PTI on the sidelines of a Nasscom seminar on IT for economic growth.
The impact would be "minuscule" and to the tune of two to three per cent. However, this might not have an adverse impact on the competitiveness of Indian software firms, he said.
Karnik also voiced fears that the impact, which was felt during the first quarter of the fiscal, might re-occur during the second quarter too if the situation prevails.
On the contrary, if the currency stabilises, the negative impact on the earnings could be mitigated, he said adding, "..we are looking at stabilisation of rupee, or even its real appreciation."
Real appreciation is the upward movement of rupee value that reflects adjustment for inflation, he added.
The Indian IT industry had posted a 26.3 per cent growth, clocking revenues of Rs 46,100 crore ($9.5 billion) in the financial year 2002-03.
Earlier, a Nasscom survey said the organisation expected the industry to post a growth in FY-04, with ITeS-BPO sector posting a growth of over 50 per cent.