Tuesday, June 10, 2014: Witnessing a sluggish growth in the last few years owing to increasing input costs and growing preference for smartphones and tablets, the IT hardware industry has urged the BJP-led NDA government at the centre to take appropriate measures to bring back growth in the sector. Challenges like inverted duty structure and infrastructure bottlenecks have largely marred the IT hardware industry in the country from realising its true potential. Moreover, the exit of big players like HCL Infosystems, Wipro and Samtel from the segment has further deterred industry confidence.
Inverted duty structure is the reduction in duty on finished goods as also on raw materials like components. According to industry experts, inverted duty structure hampers growth by making domestically manufactured goods non-competitive. As such, the IT hardware industry insists that the government should do away with SAD (special additional duty) on all components used by them. Meanwhile, there is also an urgent need to take relevant steps to encourage component manufacturing in the country. Industry pundits opine that the sector still has a lot of potential, however, high cost of power and finance, high transactional costs and poor supply chain base have increased dependence on imports thereby deterring growth.
An estimated 65 per cent of the current demand for electronic products in the country is met by imports, the remaining, mainly low-end products are manufactured locally. According to IESA-Frost & Sullivan’s Indian ESDM Market report, the ESDM industry is expected to touch $94.2 billion by 2015. In the absence of any intervention imports are likely to grow from $28 billion in 2011 to $42 billion in 2015.
