Thoughts from the trench - by Prakash Muralidharan

September 27, 2007

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Rising rupee : A case for bill rate hike ?

Filed under: Software Services, Pricing, Indian Business — Prakash Muralidharan @ 1:25 pm

I was surprised to read this article on TCS planning to hike rates because of the rupee moving north. Why would a client want to pay more because of the exchange rate?  When the rupee was depreciating for the good part of the last decade, did companies offer a discount to customers? I find this strange. It would be better to sell a rate hike by quoting an increase in wage costs at offshore. This is a fact and is something clients would be more willing to listen to. It is also strategically safer because wages rarely fall in India, but the rupee can depreciate again. This is one pill clients are unlikely to swallow easily!


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