The other day I did a blog on how the falling dollar is affecting Indian outsourcing companies.
Today we look at the other side of the coin-how it is hurting the American outsourcers.
U.S. companies had looked to India for their outsourcing in the first place with the intention of saving money.
Now, with the dollar plunging the way it has, things have suddenly become more expensive for the Americans.

The falling dollar is affecting the business world by making American services and goods cheaper and raising the cost of foreign goods and services at the same time.
With the Indian outsourcing companies raising their fees to make up the difference, many American businesses are hit hard.
Within the space of a year the American dollar has dipped 13% from about 45 rupees to about 39.
Now with marked pay increases to India, suddenly the prospect of saving money doesn’t seem very palpable and both, the outsourcers and the outsourced have been compelled to adapt. In addition, experts expect the rupee will go from strength to strength as its economy further establishes itself.
Not that India’s outsourcing industry isn’t thriving. Americans still find it more profitable to use it.
But the necessity of raising Indian salaries and the rising currency is causing Indian vendors to look more closely at their costs and prompting them to make small price increases. This leaves the Americans sending over more dollars than they had in the past and therefore not saving as much money as they had expected.
In spite of this the businesses hardest hit by the devaluation are small and medium sized Indian companies that cannot shift work to other cheaper places in the world as outsourcers can still do. Most of them work for a limited number of clients with contracts that are fixed in dollars each year.