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MAT, rising Re harmful for BPOs: Karnik
June, 07th 2007

India might lose its status as an attractive outsourcing destination due to strong appreciation in rupee coupled with imposition of Minimum Alternate Tax on IT firms introduced this fiscal.

India is still the most attractive outsourcing destination for global companies but 2-3 years down the line, it (India) may lose this status to other low-cost countries, Nasscom president Kiran Karnik.

He said the recent changes in the government policies are a matter of concern.

When wage costs in the country are rising due to rupee appreciation, the companies need some incentives in the form of tax breaks, Karnik said.

We need to take some action regarding this and send positive signals to the world to keep India as the best outsourcing destination, he said.

Karnik said a lot of companies, including the countrys largest software exporter TCS, have already started looking outside India for outsourcing their work.

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