India has become the 12th economy in the world to become a Trillion Dollar Economy. This is a very significant event… albeit it comes on the wings of a strong rupee as opposed to a sudden surge of real GDP numbers. In any case, this makes Indian companies and people in general more wealthy compared to those in the rest of the world! So, now suddenly, say, Tatas would have some spare money left after buying Corus!
Going forward of course, it means that Indian services and goods will become more expensive. So, Outsourcing will suffer. Or will it? Is outsourcing now purely driven by cost? Or is it by scale? Whatever it may be, if the Indian companies do not emphasize on productivity soon and bring in strict and religious use of tools and methodologies and removing waste that they have accumulated in terms of thoroughly inefficient process and wrong priorities, they will be history as soon as they became the "in-things"! A strong home currency has a lot of advantages.. and disadvantages. Looking at the way the Indian companies are spreading their wings outside, it seems they are ready to use their new found economic strength to hedge against the rising cost of the rupee!
Just as Y2K was the winning moment and an opportunity BEST exploited by the Indian companies…. rising Rupee will present another challenge and an interesting moment. Who wins – IBM or Infosys, Accenture or TCS – will be determined by whether the Indian companies can ride on Rupee’s strength to greater heights by concentrating on productivity and value addition or remained mired in the low cost game! The choice is clear.
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