Impact of Indian Rupee fall in 2011 on IT sector

December 19, 2011: Thanks to the export earnings; the Indian Information Technology industry is expected to harvest huge benefits as a result of depreciation of the Indian Rupee. The Information Technology sector suffered lesser loss in the stock market crash, while all other sectors suffered huge losses.

IT firms such as Tata Consultancy Services (TCS) and Wipro have experienced increase in share prices, but that of Infosys fell to a smaller extend. This has built confidence among investors and they expect that the IT firms will be the least affected by the global slowdown.

NASSCOM, which represents the IT companies, has recently stated that the growth of the IT sector will be less than estimated growth rate of 16 to 18 per cent. How ever the growth is expected to continue to be in double digit. The information technology companies are cautious about the changes in the international market and to this day none of the companies have reported any cancellation of orders from the customers.

According to experts the Information Technology sector has performed pretty well in the recent times and the depreciation of the rupee has not affected the industry. TCS has observed that the depreciation has benefited the IT outsourcing service providers in India and it will be a challenge for the IT sector in the next year.

For the IT industry the 2011 year passed on with out problems and was better than what was expected. It is expected that the year 2012 will present the industry will a stressful environment and the governments across the world will try to avoid a situation that prevailed in the US during the recession, says S Mahalingam, Chief Financial Officer and Executive Director at TCS. He added that the rupee movement has been unstable, and in the long term, the depreciation of rupee will possibly benefit the IT industry as a whole. He noted that liveliness is going to be a major factor affecting the industry and that every passing year is a challenge than the coming year and the companies should take effort in converting these challenges into opportunities.

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