PC sales plummet below 2008 levels, makers want sops

In-order to boost the ailing personal computer market in India, computer makers are asking for the removal of the minimum alternative tax and abolition of four percent special additional duty (SAD), according to an article in the Economic Times.

This has been affecting  hardware companies across India as the sales of personal computers are expected to grow by only three percent this year, levels seen way back in 2008.  Desktop PC sales, too, are expected to fall by over 10 percent due to a weak demand, mostly from corporates.

According to the Manufacturers Association of Information Technology (MAIT), the forthcoming Union Budget of budget will decide the long-term profitability of the industry. While PC peripherals like keyboards attract zero import duty, keyboard components keypads, polycarbonate, paints and plastic attracts customs duty of 10 percent which discourages local manufacturing and hence should be corrected.

“Why will companies take the trouble of importing individual components and assembling them here when they can import finished goods for less” said Bharadwaj, president of the Manufacturer’s Association  for Information Technology(MAIT) told Mint .

The Indian electronics demand is expected to grow at an annual 22 percent to $125 billion by 2014 and to $400 billion by 2020.

Apart from this, PC makers also want the continuation of the exemption from excise duty in locations like Pant Nagar in Uttarakahand for the entire 10 years as companies like Lenovo and HP have made investments there.

MAIT has also requested for other recommendations - schemes to finance personal computer purchases, including bank loans at low interest rates, subsidizing broadband access in rural areas, etc.