Outsourcing for India to remain, asserts TCS CEO

MUMBAI: India's largest software and services firm Tata Consultancy Services (TCS) on Thursday said outsourcing to the country would continue, even as the company plans to raise the charges for new clients.

Outsourcing firms in India are witnessing a fall in margins due to appreciation in rupee, which is trading below the Rs 40 a dollar mark, with falling margins. Companies have to reconsider the fee they charge from customers amidst a worry that outsourcing to the country may witness a fall.

Though, there are no plans for TCS to lower or raise billing rates for existing clients, new clients would be charged more, TCS managing director and chief operating officer S Ramadorai said.

"We will hold the billing rates for sure. I don't think we would be reducing the billing rates," he said. However, new contracts will come at higher rates, he said.

The reason for TCS opting higher rates is because of the appreciation of rupee against the dollar and the potential subprime implication, Ramadorai pointed out.

Ramadorai was confident that outsourcing of jobs to India would continue despite higher wages and attrition in the industry.

"Outsourcing will continue. Even with the increase in wages in India by 14 or 14.5 per cent a year, we are still competitive upto the foreseeable future till 2011-12."

Margins can have an implication, but outsourcing is going to be there, he added.