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MAIT predicts huge losses for grey market

However, it has warned that its predictions can come true only if the

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recommendations of the panel on development, manufacture and export of information technology hardware under the National Task Force on IT and Software Development are enacted.

The panel, which has recommended novel schemes such as the concept of Soft-Bonded IT Units and specific labour laws for the IT industry, has also said that "marginal returning of policies would have no salient impact'' and that "a major paradigm shift of the policy regime is essential''.

"All those companies which have a long-term commitment to the Indian market and will find it viable to manufacture here once the recommendations are made into laws,'' said Ram N Agarwal, president, MAIT.

There is reason to expect that Rs 50 billion would be invested in IT hardware manufacturing over the next five years, he said. Agarwal felt that the recommendations, as and when enacted, would result in breaking the "vicious cycle" existing at present where manufacturing is not taken up because the volumes are not big enough.

He said at least two venture capital funds with a corpus of not less than Rs 1 billion each, exclusively for the hardware industry, also need to be set up by institutions like ICICI and IDBI.

While the panel constituted to recommend measures to grow the software and services business came out with 108 recommendations, the one on hardware has 84.

MAIT hopes that the recommendations will be notified within the next two months. Agarwal said the recommendations meet the needs of the components, peripherals and the PC business and would also benefit buyers.

- Compiled from the Indian media

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