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Vipin V. Nair

THE changes that occurred in the tech-world in the last 10 years have transformed the way we live, communicate and do business. Yet, the country's hardware industry remained in a time warp.Mr Ajai Chowdhry, Chairman and CEO of HCL Infosystems, feels anguished when he reminisces about this period. None of the recommendations of the hardware task force was implemented. "We lost five years," says Mr Chowdhry, who co-founded HCL in 1976. "If we had implemented those recommendations in 1998, the industry would have been of a different size today." A size of 8-10 million PCs a year would have attracted major investments into the country. "But all those investments went to China," he laments.

The government's slow response helped the grey market thrive. The reduction of import duties over time made local manufacturing less attractive. "Government intervention was required then to help the industry. But it did not come through," he said. The result: "We lost a huge opportunity then," he adds.

In this milieu, companies such as HCL Infosystems sought to create new areas of growth. "That's how we came up with the concept of home PCs," Mr Chowdhry says

"We had a clear view that we needed to grow as an Indian brand," Mr Chowdhry says. In those days, volumes were low but profit margins were higher than what they are today, he said. One of the main reasons why the hardware industry never really took off was the high price due mainly toduties and local taxes. The industry could do little to bring down the prices that ranged between Rs 50,000 and Rs 60,000. Prices started to fall in the past couple of years due to technology than any help from the government. With the Internet potential beginning to be realised in the past three-four years, PC sales did go up. Only to stagnate now as service providers are yet to figure out the right means of revenue earning.

Mr Chowdhry is, nevertheless, optimistic about the future of the country's hardware sector. The industry is clocking healthy growth and PC sales are set to cross three million units this fiscal. "The recent cut in duties will reduce the price parity between an assembled machine and a branded computer," he says. "The government has given a kick-start for the industry now. We have to take it to a higher gear from here," Mr Chowdhry says.

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