IN­DIA CAN BE A HARD­WARE EX­PORTER

An­war Shirpurwala, Ex­ec­u­tive Di­rec­tor, Man­u­fac­turer’s As­so­ci­a­tion of In­for­ma­tion Tech­nol­ogy (MAIT), evan­ge­lizes the po­ten­tial of the coun­try’s hard­ware sec­tor

CRN - - COVER STORY -

What’s your out­look for IT man­u­fac­tur­ing in the coun­try? In­dia has al­ready de­vel­oped into a huge con­sumer mar­ket for IT hard­ware even though less than 10 per­cent of the pop­u­la­tion owns com­put­ers. Let’s say that in the next decade PC pen­e­tra­tion goes up to 30 or 40 per­cent; this means the size of the mar­ket would also mul­ti­ply three or four times. It’s in the in­ter­est of the coun­try to ad­dress this mar­ket lo­cally, and we need to learn from the soft­ware in­dus­try which has built a very strong base.

Thank­fully, things are fall­ing in place for us now, and the govern­ment is lis­ten­ing. We feel we are where the soft­ware ser­vices in­dus­try was in 1991. What should be the im­me­di­ate course of ac­tion? We must do away with the in­ver­sive duty struc­ture. We have a 10 mil­lion plus PC mar­ket, and a tablet mar­ket which is ex­pected to eclipse the PC mar­ket in a few years. By sim­ply do­ing away with the in­ver­sive duty struc­ture we could con­vert a large base into lo­cal man­u­fac­tur­ing. Based on stud­ies by our re­search part­ners, KPMG, this would re­sult in, by 2018, an additional rev­enue of ` 1,33,000 crore per an­num from di­rect, in­di­rect and in­duced streams. But In­dia has al­ways been re­garded as a low choice for man­u­fac­tur­ing. A rea­son for this was that the do­mes­tic mar­ket was small. To­day we are among the few coun­tries where the do­mes­tic IT in­dus­try is grow­ing. If we are able to build this as a cap­tive mar­ket then the po­ten­tial for the coun­try is huge. Once lo­cal man­u­fac­tur­ers are as­sured of vol­umes, their economies of scale will im­prove, and In­dia can po­ten­tially be a hard­ware ex­porter. What do you think is the role for In­dian chan­nel part­ners? At present a ma­jor­ity of the lo­cal chan­nels are pri­mar­ily into trad­ing and pro­vid­ing ser­vices. Glob­ally we have seen the trend that traders have be­come man­u­fac­tur­ers and cre­ators, and man­u­fac­tur­ers have be­come traders. There’s no short­age of tech­ni­cal or man­age­ment skill-sets among our lo­cal chan­nel en­trepreneurs; if pre­sented with the right op­por­tu­ni­ties they can do it. For ex­am­ple, if it be­comes more vi­able to man­u­fac­ture PCs lo­cally than im­port them, there would be op­por­tu­ni­ties for mak­ing com­po­nents. Which hard­ware prod­ucts can be man­u­fac­tured here? Any­thing for which you can build a cap­tive base for lo­cal man­u­fac­tur­ers and which does not need high in­vest­ment. An ex­am­ple could be the set-top boxes. We will also need to look at what tech­nol­ogy will sell in fu­ture, and need to in­vest on a longterm ba­sis.

In this we have to learn from some of the smaller Asian coun­tries. The best ex­am­ple is Thai­land, which is one of the big­gest man­u­fac­tur­ers of hard drives. The world re­al­ized its de­pen­dence on Thai­land for disk drives when the floods hit and there was a short­age of drives.

What we don’t need is a hand­ful of large man­u­fac­tur­ers, but a large num­ber of smaller man­u­fac­tur­ers. Thai­land did just that in the late nineties through govern­ment sup­port for the disk drive sup­ply in­dus­try so that ev­ery man­u­fac­turer sought Thai­land for com­po­nents to make disk drives. What is MAIT do­ing to get In­dia on that track? We have been ed­u­cat­ing the govern­ment. We have been ad­vo­cat­ing the ad­van­tages of set­ting up hard­ware man­u­fac­tur­ing hubs. We have been ad­vis­ing govern­ment pol­icy-mak­ers on the chal­lenges faced by the in­dus­try, and how through proac­tive poli­cies we can re­ally un­leash the IT po­ten­tial of the coun­try.

AN­WAR SHIRPURWALA

By do­ing away with the in­ver­sive duty struc­ture we could con­vert a large base into lo­cal man­u­fac­tur­ing. This would re­sult in, by 2018, additional rev­enue of 1,33,000 crore per an­num

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