Indian economy is one of the most promising economies among the emerging markets in the world. The Indian economy underwent noticeable and a consistent growth for at least five to eight years from the beginning of the last decade. Though the present economic situation seems to have a declining trend due to administrative and political failures, Indian economy has the prospective for regaining its strength. India has been a preferred center for BPO business and it impacted the Indian economy significantly that is apparent from the position of Indian currency (Indian Rupee or INR) against the U.S dollars (USD). This paper is analyzing the position of INR against USD for the last five years.

During the first half of fiscal year 2010-2011, India had an economic growth rate of 8.9 %. It was a result of a consistent economic growth for at least a five year period. The various factors such as increased opportunity for outsourcing business, an enthusiastic services industry, and a vibrant trade relationship with the global market influenced the economic growth of India to great extents. The USD-INR exchange rate is considered as an important indicator that helps in decisions on foreign investments. The USD-INR exchange rates has impacts on the fortunes of several business firms, various finance sectors and even on the Indian government. (Gupta, A & Sirohi, S., 2011).When considering the five year period ending up in 2010, the overall position of INR against USD was stable excluding some short periods of instability. For example, the INR exchange rate against USD was at 43.4 INR for 1 USD in the year 2004. This rate did not undergo considerable variations through the following years. The rates were 43.62 in 2005 and marginally increased to 44.48 in 2006. This trend continued through the next year and it reached to 43.1 towards the end of the fiscal year in 2007.