Computer hardware growth dips

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.