Weakening dollar erodes BPOs’ profit
Kathmandu, Nov 29:
People involved in Business Process Outsourcing (BPO) sector say their profits are being eroded due to the weakening US dollar.
According to Suyogya Man Tuladhar, the owner of Pentasoft, a leading Information technology (IT) company, revenues during the last ten months have gone down by around 15-20 per cent.
The clients abroad pay in dollars for the services like medical transcription (MT). As the value of the dollar in comparison to Nepali rupee is continuously sliding down for the past few months, the BPOs are earnings less.
Another BPO businessman, Alok Tuladhar agreed with Suyogya and said weakening dollar is especially worrying for Nepal because BPO businesses, which could not perform well in the past years due to political instability, suffered a setback just when it started gaining momentum.
Alok said Nepal had a slight advantage in BPO over India because of cheaper labour costs and lower living costs. But the weak dollar is threatening the industry as the profits are drastically declining.
Alok said the quality of most of the BPO work done in Nepal is lower than that of India. In the last few years, with India increasing the quality of its services, lower grade work gets moved to Nepal. Suyogya says the government in India is giving tax breaks to Indian BPO companies to stave off their losses. “But who will listen to us here?”
Insiders in the BPO industry say the government does not recognise BPO as an industry in Nepal and many companies have to use loopholes in the law to even register their companies.