Computer hardware growth dips

By : |July 14, 1999 0

In contrast to the boom witnessed in the software segment,
the computer hardware sector has witnessed a decline in growth rate of over three per cent
in 1998-99 mainly due to a dominant grey market.

The apex body representing hardware manufacturers and
service providers in the country – The Manufacturers’ Association for Information
Technology (MAIT) said that the information technology industry is fighting a growing grey
market and a duty structure which was not conducive for investments. The grey market grew
by whopping 49 per cent during the year and affected the organised IT industry
significantly because of its price sensitivity.

According to Vinnie Mehta – MAIT Director, the IT industry
is tiding over the problems of policy upheaval. Neither the 1999-2000 budget nor the exim
policy have been conducive to the growth and development of the hardware industry. During
1998-99 the PC segment grew at 29 per cent selling 10.27 lakh units as against 8 lakh
units in 1997-98 when the industry had grown at more than 32 per cent. The association has
demanded withdrawal of custom duty on parts and components, which are not manufactured in
the country. Presently, the duty component comes to more than 18 per cent.

Vinnie Mehta is keen on seeing the government adopt two
main recommendations :
•simplification of procedures
• simplification of duties.

According to MAIT President – Hemant Bharat Ram, many
Corporate houses including Acer, LG and Samsung are waiting for a stable policy before
making investments in India.

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