Curbs on ECBs to help IT-BPO sector
Nasscom has welcomed government's fresh restrictions on ECBs and hopes it would mitigate the woes of the IT-BPO sector.
By PTI |
NEW DELHI: IT industry body Nasscom today welcomed the government's fresh restrictions on external commercial borrowings (ECBs) and hoped it would help the IT-BPO sector which has been hit hard by the rising rupee.
"This is particularly helpful to the Indian IT-BPO sector, against the backdrop of the too much, too fast rise of rupee against the dollar," Nasscom said in a release here on Wednesday.
The rupee has appreciated against the dollar around 10 per cent so far this year. The industry has been concerned about this trend and its strong impact on the profitability and competitiveness, it said.
According to the government's fresh curbs on ECBs announced yesterday, "henceforth, ECB (of) more than USD 20 million per borrowing company would be permitted only for foreign currency expenditure for permissible end-uses of ECB."
This is aimed at reducing the flow of dollars into the country.
Nasscom said though liberalisation in raising global funds through ECBs is a positive step, the present circumstances are exceptional and warrant some temporary restrictions.
Due to the sharp appreciation of rupee, the top three infotech companies -- Infosys Technologies, Wipro and Satyam -- had registered lower profits in the first quarter of this fiscal.
"This is particularly helpful to the Indian IT-BPO sector, against the backdrop of the too much, too fast rise of rupee against the dollar," Nasscom said in a release here on Wednesday.
The rupee has appreciated against the dollar around 10 per cent so far this year. The industry has been concerned about this trend and its strong impact on the profitability and competitiveness, it said.
According to the government's fresh curbs on ECBs announced yesterday, "henceforth, ECB (of) more than USD 20 million per borrowing company would be permitted only for foreign currency expenditure for permissible end-uses of ECB."
This is aimed at reducing the flow of dollars into the country.
Nasscom said though liberalisation in raising global funds through ECBs is a positive step, the present circumstances are exceptional and warrant some temporary restrictions.
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Due to the sharp appreciation of rupee, the top three infotech companies -- Infosys Technologies, Wipro and Satyam -- had registered lower profits in the first quarter of this fiscal.
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