The appreciating rupee can affect the ability of Indian software services companies in bagging large outsourcing deals, according to Nasscom.

Additionally, the industry body has indicated that it is in talks with the Centre to start a fund solely to help small and medium enterprises sort out issues related to patenting.

Addressing the media on the sidelines of an one-day seminar on the role of IT in manufacturing, Nasscom president Kiran Karnik said with billing rates continuing to be under some amount of pressure, the appreciating rupee is delivering a double whammy to the margins of software services companies.

"It is a question of bottomlines. If Indian companies find that their margins are getting squeezed because of an appreciating rupee it will reduce their flexibility in terms of not being able to offer aggressive pricing as a strategy to snag big ticket deals," Karnik said.

The Nasscom view comes at a time when software service companies have seen a general reduction in margins and have reported growth which is volume driven.

Nasscom, according to Karnik, is in talks with the Centre to start a fund to help small and medium IT companies with issues related to patenting.

The move assumes significance given the general upsurge in the number of companies that are doing cutting-edge work in the products space.

"We have seen a 30-40 per cent increase in the number of companies that are involved in the products space in the last couple of years. The issue of helping out with patents and costs involved in patenting needs to be addressed and we are trying to convince the Centre to start a fund to this end. The government can lend funds as a long-term loan."