“Once it be­comes clear that it’s cheaper to as­sem­ble PCs in In­dia, al­most all man­u­fac­tur­ers will in­vest and ex­pand man­u­fac­tur­ing fa­cil­i­ties in the coun­try”

S RA­JEN­DRAN CMO, Acer In­dia

CRN - - COVER STORY -

in­clud­ing moth­er­boards and chas­sis. At present only mi­cro­pro­ces­sors and hard drives at­tract 6 per­cent CVD.

Be­sides, MAIT rec­om­mends that the Spe­cial Additional Duty be re­moved from all com­po­nents used for man­u­fac­tur­ing.

Over the years the govern­ment had kept a lower duty struc­ture for ICs and hard drives which are not man­u­fac­tured in In­dia while keep­ing higher du­ties on moth­er­boards, mem­ory mod­ules and other PCB-based prod­ucts as well as prod­ucts such as chas­sis. This was done be­cause there ex­isted, at least on paper, a po­ten­tial for man­u­fac­tur­ing moth­er­boards, mem­ory mod­ules and chas­sis in the coun­try. How­ever, with nearly 50 per­cent of the cost of a com­puter ac­counted for by the pro­ces­sor and hard drive, the ben­e­fit of sourc­ing moth­er­boards and mem­ory lo­cally does not ex­ist for the man­u­fac­turer.

“Some of the the­o­ries that we could have been a great base for man­u­fac­tur­ing com­puter chas­sis have proved to be wrong,” ar­gues Ra­jen­dran. “While In­dia is rich in min­ing and pro­duces iron ore, we have not been suc­cess­ful in cre­at­ing the right qual­ity sheet-metal for man­u­fac­tur­ing chas­sis at rea­son­able prices.”

Hence he feels the first step which the coun­try needs to take is to re­verse the duty struc­ture. “Once it be­comes clear that it’s cheaper to as­sem­ble lap­tops, desk­tops or tablets in the coun­try then al­most all man­u­fac­tur­ers will in­vest and ex­pand man­u­fac­tur­ing fa­cil­i­ties here.”

Af­ter the lo­cal as­sem­bling starts most man­u­fac­tur­ers will look for sourc­ing some of the prod­ucts lo­cally. “Re­mem­ber, lo­gis­tics is a huge fac­tor,” says An­war Shirpurwala, Ex­ec­u­tive Di­rec­tor, MAIT. “We have seen in the au­to­mo­tive in­dus­try how hun­dreds of lo­cal sup­pli­ers mush­room when­ever a car man­u­fac­turer sets up shop. In the first phase of man­u­fac­tur­ing we may see man­u­fac­tur­ers im­port­ing com­po­nents, but once the vol­umes are con­sis­tent, lo­cal en­trepreneurs would start sens­ing the op­por­tu­ni­ties.”

In­cen­tiviz­ing pur­chases

The big­gest chal­lenge is the af­ford­abil­ity of PCs es­pe­cially for those be­long­ing to SECC (So­cial Eco­nomic Caste Cen­sus) C and be­low house­holds. “If you con­sider the cost of an en­try-level PC to be about ` 22,000 a month, and con­sider the aver­age in­come of a house­hold to be around ` 12,000, you will see that it will be dif­fi­cult for such a house­hold to cough up two months’ earn­ings to buy a PC,” ex­plains P Kr­ishna Ku­mar, Ex­ec­u­tive Di­rec­tor, CSMB, Dell In­dia.

Ac­cord­ing to the Cen­sus of In­dia 2011, among 78 mil­lion ur­ban house­holds only 15 mil­lion own PCs,

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