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India needs to enhance hardware capability: Premji

August 22, 2003 14:10 IST

Stressing on rapid growth in domestic hardware manufacturing, Wipro chairman Azim Premji on Friday said a nation cannot be self-sufficient in strategic sectors like defence, nuclear energy and space technologies without domestic capabilities in hardware development and manufacturing.

"We still are denied access to high end components by the US in areas of defence and space," Premji told chartered accountants in Bangalore at a technology conference on 'Harmonizing IT power-CAs perspective' organised by the Institute of Chartered Accountants of India.

IT provided us with a once-in-lifetime opportunity to build a developed nation, the IT czar said, adding India has the potential to be a global electronics hardware manufacturer.

"The tremendous economic growth that China has witnessed in the recent decade has been fuelled to a large extent by the growth in hardware industry there. China exported hardware worth $36 billion in 2001 and is the world's third largest electronics hardware manufacturer. From a potential point of view, India is well placed too," Premji, a member of the National Task Force on hardware, said.

He said India's PC penetration in 2002 was 9 per 1000 as compared to 34 per 1000 in China and hardware consumption in India currently was $4 billion.

Quoting a MAIT report, Premji said this had a potential to multiply by 11 times to $ 44 billion in 2010 and hardware exports, which was currently $300 million, can go up to $18 billion by 2010.

Premji said the hardware sector could employ SSC, ITI or diploma holders, providing another avenue for employment to millions.

"It is estimated that this sector can generate over 1.2 million such employment opportunities by 2010," he said, adding the government was finally paying attention to the sector.

On the recent uproar against outsourcing to India by American IT firms, Premji said these reactions were but natural as the economy went through a fundamental shift.

"Concerns about job losses are natural in the local community and are emotional issues that make a good newspaper copy. But the economic reality of outsourcing is different. US economy is projected to save about $11 billion from outsourcing to India in the current year," he said.

He said Indian IT professionals in the US spent $1.2 billion contributing to the domestic economy there, besides Indian firms were paying over $350 million to US social security in 2002-03 and this amount was expected to cross $1 billion in the next few years.

"Compare these benefits to the fact that by 2010, IT jobs outsourced to India will be a mere seven per cent of the total IT jobs projected by the US Department of Labour," he said.

Pointing out that outsourcing was no longer a choice but an absolute strategic necessity, Premji said it was clear that economies and demographics dictated that IT services would be outsourced to the locations that were best suited globally -- that is, to India and other comparable economies.

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