The National Association of Software and Services Companies (Nasscom) has expressed concern over the frequent fluctuations in the currency.
Stating that such fluctuations did not augur well for the industry, Nasscom President Som Mittal said a “volatile and uncertain” currency would create problems for the industry as it would make it difficult to evolve a strategy. Uncertainty was a matter of concern for the industry as a whole. In the industry’s perspective, a stable currency would enable it prepare for long-term contracts and hedging strategies.
Though the depreciating currency could have short-term benefit for the IT industry, such considerations were narrow as majority contracts were being taken on the longer term for five years. The companies entering into longer term contracts hedge at the constant prices so that the contract could be covered for the period. “We cannot depend on currency management for profits. We don’t think our core competency is currency management. It is to get the business delivered and get the money,” he said.
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Mr. Mittal expressed concern over the Visa Bill proposed by the United States claiming it would have a negative impact on the U.S. firms too. There was still three to four months for the Bill to become an Act, but enough U.S. corporations were already talking about the negative impact the Bill would have on them. “We don’t think the law markers will want a Bill that is detrimental to their companies’ interests,” he said.