IT hardware deserves better deal: MAIT

By Our Special Correspondent

NEW DELHI, FEB. 12. With at least 15 to 20 major hardware companies closing shop or shifting to trading every year, the Indian industry is worried over the impact of the World Trade Organisation (WTO) agreement on information technology and is blaming the inadequate attention by the Government for its uncertain future.

The declaration of 2001 as the ``Year of the hardware sector'' notwithstanding, the IT manufacturing industry is seeking the Government's support to create a conducive environment so that ``we are able to attract investment in IT manufacturing so that come 2003, we are not transformed into a nation of traders''.

India has just a little over two years to honour its commitment to WTO's IT agreement that seeks to implement a zero duty regime from 2003. The industry is sore that while in India the IT manufacturing sector is languishing and is dependent on massive imports (or shipments), the export volume of China's products crossed $15.7 billion in the first six months of 2000, up by 48 per cent over last year, and computer and telecom hardware accounted for nearly two-thirds.

``This has been made possible by the aggressive policy measures adopted by the Chinese Government for promoting IT investment. On the contrary, investors (in IT hardware manufacturing) have been increasingly India shy,'' pointed out Mr. Vinnie Mehta, director of MAIT, the apex body representing the IT hardware, training and services sectors of the Indian IT industry.

The IT industry feels the policymakers are looking at the wrong end of the barrel by focussing on software exports and felicitating heads of MNCs specialising in this area. ``Developing and developed countries around the world have started harnessing IT and IT hardware for competitiveness. Today IT and electronic goods exports account for 47 per cent of Singapore's GDP and 65 per cent that of Malaysia. IT accounts for 8.3 per cent of the U.S. economy, while in India it is less than one per cent of the GDP,'' observes Mr. Mehta.

The hardware industry in India, if given the right impetus, has the potential to create job opportunities for one million Indian every year. Unlike the software industry, IT hardware sector creates jobs across every social strata, even for semi-skilled people.

In the main, the industry would like a minimum 10 per cent duty differential between `input parts and components' and `finished goods', simplified procedures to increase the velocity of business through `self declaration' based clearance of all IT imports and exports and exempt royalty on IT technology transfer from corporate tax.

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Section  : Business
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