The depreciating Indian rupee against US dollar has a short-term benefit for the IT industry and the sector should not depend on currency management for profits,a top functionary of industry body Nasscom said today.
Nasscom President Som Mittal also said the proposed US Immigration Bill will have a negative impact on American companies also and hence those corporates are also demanding their government to remove some of the provisions.
“While in the shorter terms you might say that currency depreciation may be beneficial. But it’s very narrow. Majority of the contracts we take on long terms basis for five years,” Mittal told reporters on the sidelines of an event.
“We also hedge at the our contact price. So if we had bid a contract at Rs 54 per dollar then we would also have covered for the next five years for that value,” he added.
After plunging to all time low yesterday,the rupee today recovered by rising 32 paise to 60.40 against the dollar in early trade at the Interbank Foreign Exchange market on
fresh selling of the US currency by exporters and banks. The rupee had tanked by a massive 106 paise to close at all-time low of 60.72 against dollar in yesterday’s trade.
“It is not that we are going to get windfall profits always. In fact,as an industry we do not think currency management is our core competency and our core competency is to get the business delivered and get money,” Mittal said.
On the proposed US Immigration Bill being introduced in the US Senate,he said it will take three to four months before the Bill becomes an Act.
The legislation suggests ban on client site placement for H-1B Workers and client site placement for L-1 workers (whether specialised or managerial) besides limiting total
percentage of H-1B and L-1 Workers.
“It is three to four months before that the bill becomes an act. We have enough US corporations talking about how it is going to harm them and I don’t think any lawmaker would want to have the bill that is detrimental to their companies,”
Nasscom has set up a special interest group,aimed at making India the global hub of big data analytics,as it sees a huge opportunity in this space.
Mittal said the group would set the target,train people and evolve strategies. The IT industry body has released a report on risk and procurement analytical in association with Crisil.