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IT policy must woo foreign hardware firms, says Naidu

Syed Amin Jafri in Hyderabad

Andhra Pradesh Chief Minister N Chandrababu Naidu on Friday said that if India were to compete with China and emerge as an IT superpower, it would have to make its IT policy more attractive to attract the foreign IT hardware majors.

"We are comparing ourselves with China and Israel and how they are moving fast and India is lagging behind in the IT hardware sector. The National Task Force on IT had given suggestions in 1998 to make India catch up. But most of the recommendations are not implemented. We are losing time and it is time we put pressure on the Government of India to take necessary steps right now," he added.

Inaugurating a two-day national conference on Advantage Hardware, Naidu said that during his visits abroad and in his interaction with the captains of global IT majors, he was told that India's policy on IT (hardware) was not attracting them.

Dell Computers and others had the same complaint and they would definitely come to India to set up their operations here if the government policy is made attractive enough.

Touching on the global scenario, Naidu said that 32 out of the Global 500 companies are in the IT hardware and electronics sector. Their global revenues grossed $1,009 billion, including IT hardware at $335 billion and electronics at $758 billion. India's share was just $15 billion, which was not even 0.5 per cent of the global turnover in this sector.

He said that China was already the third largest IT producer in the world, with $37 billion exports in the year 2000. Even Israel with a population equivalent to Hyderabad witnessed growth of 150 per cent in electronic exports in the year 2000.

Samsung was a success story from South Korea. Hence, India needed to learn lessons from the experience of China's rapid growth in hardware, Israel's entry into high technology areas and South Korea's progress facilitated with government support.

He said that while software sector in India has grown at over 50 per cent cumulative average growth rate in recent years, the hardware sector has not crossed 20 per cent growth rate.

He said that the National Task Force had recognised software and hardware as the two sides of the same gold coin. But it was unfortunate that the Task Force recommendations were not implemented.

Commenting on the slowdown in the IT sector, Naidu said that one view was that the chip sector has seen an unprecedented deterioration during the current slowdown, but another view was that the worst was over for the tech sector and 90 per cent venture capitalists believed that now was a good time to invest in the technology sector.

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