One key question to ask is how to develop other sources of competitive advantage, such as building high-level capabilities which cannot easily be replicated by competitors, or how to change the mix of activities carried out in India versus other countries,' he said.
'Of course, in order to do this, they will have to change their mindset: They will have to stop thinking of themselves as Indian companies and think more like global companies of Indian origin,' he said.
According to Singh, Indian companies will need to analyse their portfolio of costs and move production to where it makes the best economic sense. He said that Indian IT firms are trying to address rising wage costs by moving production within India to lower cost regions like Kolkata or Bhubaneswar and to Tier-II and Tier-III towns.
'However, this will only offset a rising rupee to a limited extent, since the costs will still be in rupees,' he said.
Singh said if Indian firms were to follow this approach, there would be less reason to use the Reserve Bank of India to intervene to force the rupee down against the dollar.
Image: Founder and mentor of Infosys Technologies N R Narayana Murthy with NASDAQ President and CEO Bob Greifeld (6th from right) celebrate with Infosys officials during the NASDAQ Remote Opening Bell Ceremony at the Infosys campus in Mysore, July 31, 2006. According to Jitendra Singh, Indian companies will need to analyse their portfolio of costs and move production to where it makes the best economic sense.
Photograph: AFP/Getty Images
Also read: The Rupee rise: Who gains, who loses
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