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Adverse effects of rupee, wage rise; but I'm still smiling:-)

The adverse effects of rise of rupee value coupled with wage increases due to competition for scarce quality human resource in India, is showing on corporate houses in India.

Bloomberg News reports that Tata Consultancy Services Ltd., India's largest computer-services provider, plans to add 5,000 workers in Mexico as competition for Indian engineers from rivals such as Accenture Ltd. lead to wage increases. Wage costs at Indian software companies such as Tata Consultancy have risen as global rivals including International Business Machines Corp. hire more engineers in the South Asian nation. A rising rupee is also crimping profit at these Indian companies, which get more than half of sales from the U.S.

Indian wages may increase an average 14.5 percent in 2007, the most in Asia, from 14.4 percent last year, Hewitt Associates Inc. said in March. Salaries for employees in the computer services industry may gain 15.2 percent, the human resources consultant said. Shares of Tata Consultancy fell 0.2 percent to 1,206 rupees as of 1:33 p.m. on the Bombay Stock Exchange. They have declined 1 percent this year, lagging behind a 4.6 percent gain in India's benchmark Sensitive Index.

Tata Consultancy Chief Financial Officer S. Mahalingam said on May 31 that the company's profit margins are shrinking as the rupee strengthens against the dollar. India's currency gained 9.1 percent against the dollar this year, eroding Tata Consultancy's earnings from the U.S.

In spite of all of this why am I smiling? The last time I made a Euro transfer to a bank in Switzerland for a sum of Euros 2200 it cost me Rupees 1,29,206 @ 58.73 but just yesterday a transfer of Euros 2250 cost me Rupees 1,24,762 @ 55.45.

That calls for a smile :-)

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