“We are concerned that both MNCs and Indian companies are beginning to increase their spread of investment to other destinations,” Mr Karnik, told PTI on the sidelines of a conference here.   

Earlier out of an US$100 investment, US$80 came to India while US$20 went to Phillipines, China or Vietnam. But now we are beginning to see the ratio changing to 70:30 or even 60:40, Mr Karnik said.

“This is worrisome because its impact is not going to happen this year or next year, but in the longer run,” Mr Karnik said, adding Nasscom’s effort is to reverse this trend.

“If we want to be number one in IT, like Japan in automobiles in the next 10 years, then we have to look at how we can continue to be attractive,” he said.

Calling for broad support from the government, Mr Karnik said, “the rapid appreciation of rupee had big impact particularly on SME sector and BPOs, while big IT companies were able to hedge correctly.”  Small companies were hit due to inability to hedge and their large dependence on US market, he pointed out.