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Are You Ready For Hardware Manufacturing?

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DQC Bureau
New Update

The Union Budget for 2001-02 could have a few surprises for hardware manufacturing in the country. Pramod Mahajan, the IT minister is aware that if we could make a success of software exports, then hardware manufacturing too could be the next opportunity, not only to fill the national exchequer with valuable foreign exchange but also create job opportunities for the unemployed.

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What is required is the political will to free IT manufacturing from the stranglehold of high taxes. That was done with software and the magnificent results are there for everyone to see. Manufacturers' Association of Information Technology (MAIT) has been asking the IT minister to follow the software tax policies with hardware manufacturing and some key announcements are expected to be made in this regard in the upcoming budget.

MAIT President Vinay Deshpande is very confident that the Union government will push for reforms further enabling India to become a hardware manufacturing destination. This step is very essential to put the manufacturing industry back on track.

How is it that a tiny state like Pondicherry attracted major IT players to manufacture their wares? It is nothing but the minimal tax regime that has brought heavy investments to the state from manufacturers benefiting its people with jobs and prosperity. 

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Some of state governments have been closely watching the developments at Pondicherry and are seriously thinking of replicating the manufacturing success story on their land.

States like Karnataka and Andhra Pradesh that have attracted software organizations in large numbers, now want hardware manufacturers to establish their facilities in their territory. And looking at these opportunities are those Indians who form the core teams at organizations like Intel, IBM, Microsoft and others. 

Encouraged by a liberalized economy, many of the talented and highly skilled engineers working at various MNCs have come back to the country to start their own ventures. There are many more who are on the look out for similar opportunities. It is now up to the central and state governments to provide the right environment for these entrepreneurs to go strong with manufacturing. 

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The Maharashtra government is doing something concrete in this regard. Many of the manufacturing facilities in its industrial estates are lying vacant or have become sick. The government has plans to take over these units and pass them on to IT entrepreneurs to inject a fresh life into manufacturing.

While this step is noteworthy, the government has to take immediate steps to improve the infrastructure to ensure that the new ventures make good business. The government should ask the right questions on why the original units became sick and went out of business. Learning its lessons quickly, it should ensure success for the new IT manufacturing units that entrepreneurs want to start.

The hardware manufacturing field is open not just to NRIs and MNCs but to every entrepreneur. Channel partners should find this field particularly attractive because they have developed expertise in IT products over a period of time. With their business acumen and entrepreneurship, partners should find manufacturing a profitable business when governments go ahead in creating a friendly tax and labor regime.

sylvesterl@cmil.com

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