India, the biggest location for global outsourcing, has seen its currency take a tumble. The devaluation has fattened the profits of Indian outsourcing providers, but customers in the U.S. are unhappy that they're not getting any benefit from the currency's move.
The rupee has fallen hard against the dollar amid concerns about the Indian economy, getting as high as 68 per dollar in late August. By mid-September, it was trading at 63 per dollar, up from 54.77 at the start of 2013 and 45.12 at the start of 2011.
Since U.S. companies generally pay in dollars for work they send to India, "these Indian firms are gaining margin, because our U.S. dollars are buying that many more rupees," said Richard Chang, a principal at Alsbridge, a sourcing advisory and benchmarking company. "That's a fairly big windfall for them."
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Susan Kelly
Susan Kelly is a business journalist who has written for Treasury & Risk, FierceCFO, Global Finance, Financial Week, Bridge News and The Bond Buyer.
