Domestic hardware vendors may get preference in government purchases

NEW DELHI: The Centre plans to make it mandatory for government departments to give preference to domestic manufacturers for procuring IT-related hardware, including computers. The move — proposed to be implemented both in the Centre and the states — is aimed at promoting the domestic hardware manufacturing industry.

The decision has been taken at a meeting of the taskforce set up to promote growth in the electronics and information technology sector. The taskforce was constituted on the recommendation of an inter-ministerial group (IMG). The taskforce, chaired by principal secretary to the Prime Minister, however, has exempted public sector units from such an obligation.

The inter-ministerial group had recommended all government departments and PSUs should give preference to local manufacturers for purchasing IT-related items. The taskforce, however, exempted PSUs from the obligation and stressed the need for preference to all domestic producers instead of giving preference to only local manufacturers, an official source said.

Sources in the government said the taskforce had asked the department of information technology (DIT) to chart a road map for the implementation of its recommendations.

The step would discourage import of computer hardware and would encourage the companies to set up manufacturing units in the country, industry experts said.

“Today, 50% of the laptops are being imported while the comparative figure for desktop is 30% which needs to be lowered,” Zenith Computers chairman Raj Saraf said, adding that the move would help attract big-ticket investment in the country.

According to an estimate by the Manufacturers Association of Information Technology (MAIT), the personal computer market is pegged at 6.3 million units per annum and is growing at over 23% per annum. PC penetration in the country has also gone up from 18 per thousand to 22 per thousand in 2006-07, driven predominantly by laptop sales.

The government’s move would also boost the domestic manufacturing of printers where 70% requirement is met through imports. The total size of the printer market is pegged at 2.3 million units per annum, which is growing at 25% per annum.