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Krishnan Thiagarajan

DOMESTIC computer hardware manufacturers, such as HCL Infosystems, Wipro (its hardware division) and Zenith Computers, may be the key beneficiaries of the reduction in the excise duty from 16 per cent to 8 per cent and the abolition of the 4 per cent special additional customs duty (SAD).

Other multinational brands such as Hewlett Packard, Dell and Samsung may also get some leg-up from these moves.

This reduction will offer substantial cushion to the organised sector manufacturers to compete with the grey/assembled market for personal computers. The latter has been steadily eating into the market share of the former.

In the first half of 2003-04, the market share of assembled PCs (comprising unbranded and smaller regional brands) rose to 57 per cent from 48 per cent in the corresponding period of the previous year.

Both local and MNC brands were the losers in this strong showing by the assembled PC manufacturers.

The domestic manufacturing, which has been languishing for several years, will become more attractive and PC penetration may also get a commensurate boost.

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