Even as the US debt ceiling is set to usher in currency fluctuations, the Gujarat IT industry is expecting export realisations to fall by 3-5 per cent in the coming days. While in the recent past the industry in Gujarat has been reducing its dependent on US dollar, players believe the next couple of months will witness impact on realisations.
"Over the last few months rupee has been strengthening from Rs 45.5 against the US dollar to Rs 44. It is expected that rupee will soon breach the Rs 44 level. This will make export realisations go down by 3-5 per cent over the next couple of months," said Rajan Vasa, CMD of Ahmedabad-based Contech BPO Services Limited. However, since the industry has reduced dependence on the US dollar, the impact will be only on half of IT exports in the state.
The impact comes at a time when after remaining almost stagnant last year, IT exports in Gujarat are expected to rise in the coming months. This, in spite of a 10-15 per cent decline in 2010-11 IT exports from Gujarat which stood at Rs 1,000-odd crore as against Rs 1,200 crore in 2009-10.
"IT exports in Gujarat have been down by 15 per cent for the fiscal 2010-11. This has happened due to diversion in export contracts in IT from other units to SEZs. However, in the coming days currency fluctuations may impact export realisations for the industry in Gujarat," said Ajay Sharma, director, Software Technology Parks of India (STPI), Gujarat.
However, to safeguard their export realisations, IT units in Gujarat may increase hedging of contracts, say industry players. "Pound and euro are holding on and no major changes are expected in near future. However, since exports in US dollar will be impacted, several companies in Gujarat are looking at hedging 50 per cent of their exports for next six months or the rest of the fiscal," said Vasa.
Meanwhile, more number of IT units in Gujarat are spreading their markets from the US to other regions like Europe, Middle East and Africa.
