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MAIT calls for more exports

The import-intensive hardware industry has proved its vulnerability to the vagaries of the exchange rate. This year's performance has been particularly bad.

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According to MAIT, though the growth rate in volume terms is around 50 per cent, in value terms it hovers around 25 per cent.

Margins have been getting thinner and thinner. The fierce competition for the small share of the domestic market has driven profits down. Foreign brands have been hit badly by the depreciation of the rupee.

Since most of the MNCs are importing and selling finished machines in India, the downfall of the rupee has worked against them both ways.

MAIT officials feel that this could have been avoided to a certain extent if they had a manufacturing bases in India and exported machines.

"MNCs are secure in the domestic market only as long as the parent companies can absorb losses,'' Vinnie Mehta, deputy director, MAIT, claimed. "There is a clear message that they should think of India as a base,'' he said.

Exports would have offered a natural hedge against exchange rate fluctuations for Indian companies too.

However, like the MNCs, the Indian companies too have been looking at the domestic market only. Market reports say that the unbranded machines and assemblers have done well enough for themselves.

However, some of the domestic manufacturers are expected to hike their prices.

Making an optimistic estimate, Mehta put the total number of units that will be sold this year at 100,000.

Pessimistically, it might be around 80,000 units. The industry's fortunes may change once the government clears various pending schemes.

The ISP policy, the national information infrastructure and electronic commerce are all programmes that will fuel the market for hardware.

MAIT has expressed a commitment to export. It has been carrying out extensive studies and has been working on simplification of export procedures.

A delegation recently visited Singapore to study the electronic system, which processes all relevant documents within 15 minutes.

- Compiled from the Indian media

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