HP to invest 1 bln rupees in 2nd Indian plant

NEW DELHI  - Computer and printer maker Hewlett-Packard Co. said it is investing 1 billion rupees ($21.9 million) to set up a second plant in India to meet demand for its products.

The plant in Uttaranchal will have an initial output capacity of 300,000 computers a month. It will provide employment to nearly 1,000 people and supplement Hewlett-Packard's existing facility in southern India.

The unit, which will make desktops, notebooks and servers, is expected to be operational by March.

Computer sales in India rose 32 percent in the year to March 2006, industry data showed, on firm demand from sectors such as banking, information technology and telecommunications. Falling prices and affordable financing have also contributed to demand.

Hewlett-Packard is one of a growing tribe of foreign companies that have investing in India, either to soak up local demand or to source talent and products in Asia's fourth-largest economy.

In September, HP's larger rival Dell Inc. said it would set up manufacturing operations in India in the first half of 2007.

Both Dell and HP compete with local players such as HCL Infosystems Ltd. and Wipro Ltd.