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`The zero duty regime in the IT industry will come into effect in the next one and a half years and setting up new hardware units may not remain lucrative. The potential in hardware is unlimited, but we need to act fast before the advantages disappear.'

NEW DELHI, June 15

INDIAN infotech and IT enabled services companies must seize emerging opportunities with urgency as the country's advantages in the area could come under pressure in the next few years, the Union Communications, Information Technology and Disinvestment Minister, Mr Arun Shourie, said here on Sunday.

"Opportunities are fleeting... The advantages are fleeting. The advantages that we have in services can come under pressure in three years time," Mr Shourie said at a function to give away the Electronics and Computer Software Export Promotion Council (ESC) awards for excellence in electronics and IT exports for the past two years.

Mr Shourie said that the impending zero import duty regime for hardware was the biggest challenge for the country's IT sector and Indian companies would have to act fast or be left out in the race.

"Although the Indian IT industry is adept at grasping opportunities, it often tends to overlook hurdles that may arise in the future. The zero duty regime in the IT industry will come into effect in the next one and a half years and setting up new hardware units may not remain lucrative. The potential in hardware is unlimited, but we need to act fast before the advantages disappear," he said.

The Minister said that the Government would soon constitute a task force with industry representation for the hardware industry. Unlike previous efforts that were dominated by the Government, the new body would comprise people from the industry and try to identify 40-50 global companies that could be approached and enthused to set up manufacturing bases in India, he said.

The prominent winners of the ESC awards for export excellence include Moser Baer India Ltd, Infosys Technologies, Wipro, TCS and BPL.

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