For the same reason, the venture capital community has turned apprehensive that the returns on its investments may come down. 

The currency appreciation has increased the capital (in dollars) required for starting a business in India. The rising cost (in rupees) of employees, building space and infrastructure has only made matters worse. 

"It is adding negativity to the process," said Kiran Konduri, CEO and founder of Four Interactive, a Bangalore-based start-up that manages Asklaila, a local search engine. 

Many Indian IT start-ups raise money in dollars and invest in rupees. Every $1 million raised by an Indian firm was translating into Rs 4.4 crore (Rs 44 million) a year ago; it now fetches Rs 3.9 crore (Rs 39 million) - a gap of Rs 50 lakh. This, coupled with the increase in costs, is increasing the capital requirement for starting a business. 

"If I invest $10 million in a company, now suddenly I am missing Rs 5 crore (Rs 50 million). So the amount of money to make the company profitable in dollar terms will go up, and correspondingly my return will fall," said Ashish Gupta, founding managing partner, Helion Ventures, adding: "Because of the US downturn, the India market will become even more heated and salary growth will be higher. And when the dollar weakens further, it will negatively impact the venture returns." 

Industry analysts are of the opinion than the strong rupee will increase the amount of money available to India. 

"My sense is that you will see more money coming to India, and you will see that in many ways it is bad news. Companies will take more money. The cost of investing will go up. And unless the returns start coming, they may find that they have less to do with their money," he added. 

This would basically affect the start-up firms, who need huge investments till they reach break-even. However, this may not affect the inflow of venture capital to the country, since fund-raising companies are not driven by short-term objectives, industry sources said. 

"I don't feel this will affect the fund inflow to India. The need to raise venture capital funds is not driven by short-term requirements but by long-term objectives," said Srini Vudayagiri, managing director (India), Lightspeed Venture Partners. 

Experts say the Indian firms, depending on their market and focus geographies, need to be cautious while converting the dollar funds into rupees. If the rupee appreciation continues unabated, this may further eat away a portion of the fund if they wait longer in converting the dollars into rupees.