How MAIT wants to up IT hardware manufacturing

MAIT shares budget recommendations to boost IT manufacturing
Manufacturers’ Association for Information Technology (MAIT) has sought measures from India Government to increase IT hardware manufacturing to $2.6 billion.

MAIT says favorable duty differential regime can generate 10,56,000 jobs in India IT manufacturing and related services. If estimated demand for 21 million PCs by 2020 is fulfilled through domestic production, India can garner a 30 percent global market share.

It is estimated that for every million units of production, approximately 660 people are employed directly on the assembly side and another 2,640 in components manufacturing. Further, a multiplier effect of 3X can be safely assumed for related Services jobs that the sector would add.

With the right policy measures, it would be possible for India to supply the 21 million units estimated domestic demand for PCs in 2020 entirely from local manufacturing.

India-based firms would be able to scale up production to an aggregate of 80 million units to capture a 30 percent global market share. This can generate 53,000 direct jobs in PC assembly, 211,000 jobs in components manufacturing and 792,000 jobs in related services, aggregating to 10,56,000 jobs over the next five years.

The cost of manufacturing is estimated to be higher in India against global hubs. Cost of power, real estate, logistics, expenses on account of freight, as well as fiscal factors are contributing to agonies of hardware makers in India.

In 2015, the share of domestic manufacturers was 45 percent of the total ESDM market of $31.6 billion. For the IT products market of $5.8 billion this proportion was lower at around 22 percent.

PC penetration in India is at a mere 9 percent, while Sri Lanka is at 12 percent and China at 50 percent.

India is emerging as a design hub for component suppliers. Co-location of design centers and manufacture of Notebook PCs and Desktop PCs can help drive innovation cycle driving sustained growth for India’s digital economy.

Nitin Kunkolienker, director, Smart link, said: “We have suggested to the Government of India some key policy and market interventions to achieve the vision of ‘Net Zero Imports’ and ignite a culture of domestic ICT and Electronics product manufacturing in the country.”

“The ability of the Government of India to address some of the controllable factors such as tax rates will make manufacturing in India more competitive. This will increase the capacity utilisation of existing players and also attract investments from other players, who are currently importing their products into India and not manufacturing locally,” said Krishnakumar P, vice president – Consumer and SMB, Dell India.

“As a part of its Digital India program, India government should look at all opportunities that make this accessibility to technology in general, and PCs in particular, possible for the end consumer,” said Sandeep Aurora, director – Marketing and Market Development, Intel India / South Asia.

“We believe an impetus to PCs will help transform India into a digitally empowered society and a knowledge economy,” said Priyadarshi Mohapatra, country general manager – CCG, Microsoft India.

“Duty Differential policy for PC manufacturing can go a long way in utilizing hitherto unutilized capacities, and further creating a sustainable IT hardware manufacturing ecosystem for the long-term,” said Rahul Agarwal, managing director at Lenovo India.

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