A Study of Computer Hardware and Software Services Exports of India

4 A Study of Computer Hardware and Software Services Exports of India G. V. Vijayasri, Research Scholar, Department of Economics, Andhra University, Visakhapatnam, Andhra Pradesh, India ABSTRACT The Computer Hardware and Computer Software Services exports have been widely studied and also examine the production, Changes in the direction of Computer Hardware and Computer Software Services Exports and also study the major items and companies wise Exports of Computer Hardware and Computer Software Services. To assess the status of the Exports, relevant data and information have been collected from secondary sources.. It is shown that the software and service sector not only contributes significantly to export earnings and GDP but also emerges as a major source of employment generation in the country. Besides, the information technology (IT) sector has served as a fertile ground for the growth of a new entrepreneurial class with innovative corporate practices and has been instrumental in reversing the brain drain, raising India s brand equity and attracting foreign direct investment (FDI) leading to other associated benefits.. Middle East countries remain the top destination of export for Computer Hardware during the year 2011-12. Personal Computer has emerged to be the top item of export during the year 2011-12.. While the Computer Hardware sector in India is currently small, there are several advantages that India offers that can be effectively leveraged to achieve higher growth. Keywords: Information Technology, Exports, Computer Hardware and Software Services, Production INTRODUCTION: Information Technology (IT) is the industry, which through the use of computers and other supporting, equipment helps in the spread of knowledge. The term information technology includes computers and communication Technology along with associated software. Information Technology (IT) is the acquisition, processing, storage and dissemination of vocal, pictorial, textual and numerical information by a micro-electronicsbased combination of computing and telecommunications. IT is the technology (hardware & Software) requires for the processing of data and other information. IT is a term that encompasses all forms of used to store, exchange and use information in its various forms (business data, voice conversations, still images, motion pictures, multimedia presentations, and other forms including those not yet conceived). It is a convenient term for including both telephony and computer technology in the same word. It is the technology that is driving what has often been called the information Revolution. Information Technology for some time was synonyms to computers. The term is commonly used as a synonym for computers and computer networks, but it also encompasses other information distribution technologies such as television and telephones. Several industries are associated with information technology, such as computer hardware, software, electronics, semiconductors, internet, telecom equipment, e-commerce and computer services. The basic distinction in IT is between hardware and software. The Computer Hardware and Computer Software/ Services industry, a comparatively new entrant in India s export horizon, has emerged as a fore-runner among all industries and has been consistently trading on a high growth path in recent years. Every computer consists of hardware and software. Both the hardware and the software are very important for the way in which the computer operates. Any problem that might occur within the function of computer hardware or software influences the way in which the computer functions. This is why it is very important for all of us to become aware of what our computer consists of and how its components operate so as to be able to overcome certain problems that might occur within our PC. The hardware is considered the most important part within a computer because even the software is influenced by it. This is way it is very useful to know about the importance of computer hardware so as to become aware of the necessity of buying good quality components for our PC so that it might function properly. OBJECTIVES: 1. To analyse the performance of India s Software and Hardware Industry. 2. To analyse the changes in the direction of India s computer Software and Computer Hardware exports

5 3. To examine the trends in Computer Software and Computer Hardware production and exports of India A multi-pronged approach has been adopted for the study on Computer Hardware and Computer Software Services Exports of India. To assess the status of the Exports, relevant data and information have been collected from secondary sources. This secondary data was collected from Electronics and Computer Software Export Promotion Council of India (ESC). This paper makes an attempt to delineate various dimensions of Computer Hardware and Software services exports from India. SERVICES AND SOFTWARE VS. HARDWARE The services and software segment of IT industry in India is more robust than its hardware counterpart. India has become one of the most favoured destinations for sourcing software and ITES. The revenue of IT services & software and ITES-BPO taken together reached US $ 22.2 billion during 2004-05 out of which US $ 17.3 billion was earned through export. India ranks high in comparison to its competitors such as China, Philippines, Ireland, Australia, Canada, etc., in various parameters such as quality of the labour pool, cost advantage, linguistic capabilities, project management skills, and overall quality control. In addition, India is able to offer a 24x7 services and reduction in turnaround times by leveraging time zone differences. India's unique geographic positioning makes this possible. Emerging as one of the key investment markets in the country, the ITES-BPO segment of the industry is on a rapid growth path. This segment generated revenue of US $ 5.7 billion in 2004-05, representing a growth of 46% over the previous year. Although 90% of the revenue is generated through export, there has been tremendous growth in domestic market as well. The size of domestic market in the ITES-BPO segment increased from US $ 300 million in 2003-04 to US $ 600 million in 2004-05. Hardware segment of the IT industry in India has not shown the same level of progress as experienced by ITES and software (It is also true that hardware segment of the IT industry has not received the kind of government support received by its other counterparts. Complications in the local indirect tax structure and high rates of excise and sales taxes have only added to the industry's woes. It is also evident from the fact that while pharmaceutical and automobile companies are encouraged to do R&D through a 150% write- off on expenditure, no such facility has ever been extended to hardware. Again, while labour laws have been amended for IT services & software and ITES-BPO segment, no such initiative has been taken for the hardware segment). Profitably manufacturing semiconductors and other sophisticated hardware components typically requires infrastructure, large scale investments in capacity, and accumulated experience that India does not possess, and is not in a position to acquire easily (Singh, 2002). However, India does perform numerous hardware assembly tasks internally, almost entirely for the domestic market. Hardware components are typically imported from the Southeast or East Asian countries. As was the case with several East Asian countries, it is also possible for India to transform its capability from assemblers of sophisticated components produced elsewhere to producer of hardware through learning by doing. The design of hardware typically involves the development and use of appropriate software codes, therefore, hardware design could be a promising area for the Indian IT sector. It is imperative that India should focus on the areas where software expertise matters more than the manufacturing infrastructure. Obviously, it will still require significant improvement in infrastructure, broader labour law reform, and careful assessment of market demand. As Desai (2000) pointed out, there is a need for flexible labour laws not only to boost hardware segment of the industry but also to realize full benefits of growth in India's IT sector. In fact, a flexible and transparent regime of labour laws would contribute to increased employment and productivity and, therefore, appropriate legislation would be in the interest of both workers and manufacturers (Rigidity in labour laws is one of the main reasons of sluggish growth in employment in India. It is amazing to know that India's employment elasticity of output growth is declining dramatically, e.g., from 0.52 during 1983-1994 to 0.16 during 1993-2000.Therefore, the growth rate of employment declined from 2.7% per annum during 1983-94 to 1.1% during 1993-2000 when the growth of output, i.e., GDP, accelerated from 5.2% to 6.7% per annum). Production of computer hardware increased from Rs. 14970 crore (US$ 3286 million) estimated in the year 2010-11 to Rs. 16500 crore (US$ 3438 million) in the year 2011-12. Production of computer hardware registered a growth of 10 percent (5 percent in US$ terms) in the year 2011-12. Production of Computer Hardware has been growing at an annual average growth rate of 5.21 percent (3 percent in US$ terms) during the past five years. The production of Computer Software Services increased from Rs. 308150crore (US$ 64956 million) estimated in the year 2009-10 to Rs. 341200 crore (US$ 74890 million) in the year 2010-11. Export of Computer Hardware registered a steep decline of 31.58 percent (28.76 percent in US$ terms) during the year 2010-11 over the year 2009-10. In value terms export of Computer Hardware is estimated to be Rs. 1300 crore (US$ 285 million) during 2010-11 down from Rs. 1900 crore (US$ 401 million) in 2009-10.The Export of Computer Software Services increased from Rs. 241950 crore (US$ 51001 million) estimated in the year 2009-10 to Rs. 262500 crore (US$ 57616 million) in the year 2010-11.

6 COMPUTER SOFTWARE INDUSTRY IN INDIA The rapid growth of ITES-BPO and the IT industry as a whole has made a deep impact on the socio-economic dynamics of the country. The total IT Software and Services employment has grown from 284,000 in 1999-2000 to 1.63 million in 2006-07 and expected to reach 2.0 million marks in 2007-08 (excluding employment in Hardware sector). The indirect employment attributed by the sector is estimated to about 8.0 million in the year 2007-08. Hence, Indian Software industry can continue to have manpower led growth creating large scale employment. It is a well known fact that export oriented software and service sector is indeed the driving force of Indian IT industry and it is widely held as the engine of growth and earner of foreign exchange. Its share in total software industry has increased from 34.69 per cent in 1985-86 to 77.51 per cent in 2007-08. At an annual growth rate of 50 per cent over the last decade (1990-00), the Indian software and service sector has expanded faster than in any other Countries of the world of comparable size (Raghavan and Nair, 2001). Software is a knowledge driven industry. It requires a team of highly skilled professionals for its success. Today, the Indian IT Services and ITES sector employs over 25 lakh knowledge professionals during the past five years. Almost all major IT players in the world have set up subsidiaries or collaborations in India. The major attraction being an "abundance of technically qualified and cheap software manpower". This may have been the case before the start of the growth phase, but now there is, in fact, an acute shortage of qualified and trained manpower. This is getting reflected in the spiralling salaries (one of the highest average starting salary today), and more importantly, a frequent job-hopping culture. India, today have 7 Indian Institute of Technologies (IITs) and over 300 other Regional Engineering colleges / private colleges imparting IT education. As per a study approximately 5, 00,000 people are needed every year to meet the growth targets of the software industry. However, the total production from education and training institutions today is only about a third of this. Thus, India has established a definite superiority in software services production. Recognizing the enormous significance of the Indian IT sector especially software export. COMPUTER HARDWARE INDUSTRY IN INDIA: The computer hardware& peripheral industry showed lacklustre performance during 2008-09. SMEs, retail, BPO/IT-enabled services and corporate sectors demonstrated restraint in IT purchases due to concerns of liquidity and general economic performance. The demand for Personal Computers (PCs) has remained sluggish. Deteriorating overall business condition has made a dent on demand in 2008-09, which is reflected in the decelerated growth rate in production of computer hardware. Most hardware companies import almost 70 percent of their raw material requirement. Depreciation in the Indian rupee adversely affected the raw material cost and continued to impact the industry margins and arrested the price drops in IT products. The overall PC sale for 2008-09 is expected to drop to 6.78 million as against 7.34 million during 2007-08. The production figure for this segment for the year 2008-09 is estimated to be Rs. 13,490 crore with growth plummetingby15percent. A total of 5.27 million desktops and 1.5 million notebooks estimated to be consumer in 2008-09. Desktop sales estimated to decline by 4% while that of notebooks 21%. The slowdown in consumption can be attributed to the dampening of consumer sentiment in India due to the global economic crises, especially in the second-half of 2008-09. The total PC sales during the first half of 2009-10 (April - September 2009), with desktop computers, notebooks and net books taken together, were 3.71 million units, registering a growth of about one percent over the corresponding period in the last fiscal year. Out of this total PC sale, the total sale of desktops is estimated at 2.61 million and that of notebooks & net books at 1.1 million. While desktop sales have declined by 11%, that of notebooks & notebooks have grown by 43% over the same period of last year. In the enterprises, the overall consumption in the PC market was led by telecom, banking and financial service sectors, and education and households segments. Verticals such as BPO/IT-enabled services, retail and the Government, which traditionally account for significant proportion of the IT market, were very conservative in their IT spends in First half (April- September) of 2009-10. India is one of the fastest-growing IT systems adoption of non traditional businesses like and hardware market in the Asia-Pacific education, retail, healthcare & hospitality, etc. region. Most of the prominent global vendors and some locals have strong presence in the Indian market. Most MNCs have their assembly units in India. PC sales are expected to record a growth of 12 from Rs. 14430 crore (US$ 3042 million) per cent in 2010-11 to touch 9.7 million. The estimated in the year 2009-10 to Rs. 14970 Notebook sales are estimated to be 3.5 million crore (US$ 3286 million) in the year 2010-11. in 2010-11 against 2.5 million in 2009-10, a growth of 40 per cent. This shows that Notebooks have caught the fancy of the consumers. Desktop sales are expected to reach 6.2

7 million in 2010-11 against 5.5 million in 2009-10, a growth of 12.7 per cent. As regards servers, sales posted a growth of 41 per cent during second quarter 2010-11 on account of the easing of the Economic slowdown. Establishments which had been postponing their major IT purchases in last few quarters are now ready to invest in IT, which could be the major reason for the growth in the server sales. The Server market is expected to register positive growth in the future as the Server market expands to smaller cities and Small and Medium Businesses (SMBs). The small city growth is largely fuelled by the larger organizations strengthening their base in smaller cities on account of cost advantages. The SMB growth is largely fuelled by the India is one of the fastest-growing IT systems adoption of non traditional businesses like and hardware market in the Asia-Pacific education, retail, healthcare & hospitality, etc. PRODUCTION OF COMPUTER HARDWARE& SOFTWARE SERVICES The Table 1 represents the production of computer hardware increased from Rs. 8800 crore (US$ 1960 million) estimated in the year 20004-05 to Rs. 10800 crore (US$ 2440 million) in the year 2005-06. The production of Computer Software Services increased from Rs. 99040 crore (US$ 22058million) estimated in the year 20004-05 to Rs. 134600 crore (US$ 30404 million) in the year 2005-06. Table: 1Growth in Production of Computer Hardware& Software Services Year Computer Software& Services Computer Hardware Rs. Crores US$MLN Rs. Crores US$MLN 2004-05 99040 22058 8800 1960 2005-06 134600 30404 10800 2440 2006-07 183000 42312 12800 2960 2007-08 222010 55144 15870 3942 2008-09 285064 61984 13490 2933 2009-10 308150 64956 14430 3042 2010-11 341200 74890 14970 3286 Source: Electronics and Software Export Promotion Council, Statistical Year book, different years. Production of Computer Hardware& Software Services 400000 350000 300000 250000 200000 150000 100000 50000 0 134600 99040 183000 222010 341200 285064 308150 8800 10800 12800 15870 13490 14430 14970 Computer Software& Services(Rs Crores) Computer Hardware(Rs Crores) Production of computer hardware increased from Rs. 14970 crore (US$ 3286 million) estimated in the year 2010-11 to Rs. 16500 crore (US$ 3438 million) in the year 2011-12. Production of computer hardware registered a growth of 10 percent (5 percent in US$ terms) in the year 2011-12. Production of Computer Hardware has been growing at an annual average growth rate of 5.21 percent (3 percent in US$ terms) during the past five years. The production of Computer Software Services increased from Rs. 308150crore (US$ 64956 million) estimated in the

8 year 2009-10 to Rs. 341200 crore (US$ 74890 million) in the year 2010-11. EXPORTS OF COMPUTER HARDWARE& SOFTWARE SERVICES: The following table indicates that the Export of Computer Hardware registered a growth of -16.7 per cent (-14.6 per cent in US$ terms) during the year 2004-05 over the year 2003-04. In value terms export of Computer Hardware estimated to Rs. 1200 crore (US$ 267 million) up from Rs. 1440 crore (US$ 313million). The Export of Computer Software Services increased from Rs. 77300 crore (US$ 17216 million) estimated in the year 20004-05 to Rs. 105000 crore (US$ 23718 million) in the year 2005-06. Table: 2 Growth in Exports of Computer Hardware& Software Services Year Computer Software& Services Computer Hardware Rs. Crores US$MLN Rs. Crores US$MLN 2003-04 5800 12608 1440 313 2004-05 77300 17216 1200 267 2005-06 105000 23718 1025 232 2006-07 146000 33757 1500 347 2007-08 175000 43467 990 246 2008-09 227834 49540 1650 359 2009-10 241950 51001 1900 401 2010-11 262500 57616 1300 285 Source: Electronics and Software Export Promotion Council, Statistical Year book, different years. Exports of Computer Hardware& Software Services 300000 250000 200000 150000 100000 50000 0 105000 77300 175000 146000 227834 241950262500 5800 1440 1200 1025 1500 990 1650 1900 1300 Computer Software& Services(Rs.Crores) Computer Hardware(Rs. Crores) Export of Computer Hardware registered a steep decline of 31.58 percent (28.76 percent in US$ terms) during the year 2010-11 over the year 2009-10. In value terms export of Computer Hardware is estimated to be Rs. 1300 crore (US$ 285 million) during 2010-11 down from Rs. 1900 crore (US$ 401 million) in 2009-10. The Export of Computer Software Services increased from Rs. 241950 crore (US$ 51001 million) estimated in the year 2009-10 to Rs. 262500 crore (US$ 57616 million) in the year 2010-11. DIRECTION OF COMPUTER SOFTWARE SERVICES The following table indicates that there is also evidence to suggest that the export market is becoming more diversified. Table 3 indicates North America remains the top destination for India s Computer Software/ Services Export up to 2010-11. Export to this region registered a growth of 7.46 % (11.89 % in US $ terms) during 2010-11 over 2009-10. In value terms, export of computer software/services to North America increased from Rs.

9 29657.7 crore estimated in 2002-03 to Rs. 147000 crore estimated in 2010-11, while EU countries increased from Rs. 10597.35 crore estimated in 2002-03 to Rs. 81800 crore estimated in 2010-11. Table:3 Changes in the direction of Computer Software/Services exports (including BPO) (Rs Crores) Destination 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 Singapore, Hongkong & other South Asian Countries Europe (EU countries) 1687.95 (3.63) 10597.35 (22.79) 1950 (3.36) 14549.7 (25.09) 2381.4 (3.08) 21146.9 (27.36) 2800 (2.67) 27000 (25.71) 4500 (3.08) 39420 (27) 6500 (3.71) 46725 (26.7) 6493.27 (2.85) 69489.37 (30.5) 8000 (3.31) 75800 (31.33) 8400 (3.2) 81800 (31.16) North America 29657.7 (63.78) Middle East countries Japan Korea& other Far East Countries Australia & Other Ocean Countries 692.85 (1.49) 2064.6 (4.44) African countries 637.05 (1.37) Russia and C.I.S countries Australia & Other Ocean Countries 4.65 (0.01) 632.4 (1.36) 35777 (61.68) 681 (1.17) 3110 (5.36) 621.58 (1.07) 2.31 (0) 748.57 (1.29) 47222.7 (61.09) 1197.82 (1.55) 2639.7 (3.41) 1236.95 (1.6) 0.58 (0) 1100.52 (1.42) 65200 (62.1) 1300 (1.24) 3200 (3.05) 2200 (2.1) 25 (0.02) 425 (0.4) 90109.47 (61.72) 2259.81 (1.55) 3314.2 (2.27) 710 (0.49) 92.89 (0.06) 2460.82 (1.69) 107625 (61.5) 2292.5 (1.31) 4900 (2.8) 1000 (0.57) 122.5 (0.07) 2975 (1.7) 133100.6 (58.42) 6835.02 (3) 2734.01 (1.2) 2278.34 (1) 18227 (0.08) 3873.18 (1.7) 136800 (56.54) 6200 (2.56) 3100 (1.28) 2700 (1.12) 250 (0.1) 4100 (1.69) 147000 (56) 7875 (3) 3413 (1.3) 3150 (1.2) 886 (0.34) 4463 (1.7) Latin America 51.15 (0.11) 71.18 (0.12) 82.9 (0.11) 350 (0.33) 322.31 (0.22) 610 (0.35) 341.75 (0.15) 2300 (0.95) 2625 (1) Europe (Non EU Countries) 474.3 (1.02) 488.6 (0.84) 290.76 (0.38) 2500 (2.38) 2810.5 (1.93) 2250 (1.29) 2506.17 (1.1) 2700 (1.12) 2888 (1.1) Total 46500 57511.3 75156.9 102500 146000 175000 245878.7 241950 262500 Source: Electronics and Software Export Promotion Council (ESC), Statistical Year book, different Years Note: Figures in brackets show the percentage of Sectoral Total The share of North America traditionally the leading destination of India s Computer Software exports has declined by more than 7 percentage points since 2002, while that of EU countries exports has increased by more than 8 percentage points since 2002. EU, South Asian Countries, Middle East Countries remains the 2 nd, 3 rd, 4 th, 5 th, and 6 th top destination respectively during the year 2010-11 as well. Export to Middle East Countries registered a high growth of 27% (32% in US $ terms) during 2010-11. DIRECTION OF COMPUTER HARDWARE EXPORTS The follow table represents the Export of Computer Hardware to EU Countries, South Asian Countries, North America, Middle East Countries and Latin America registered good growth during the year 2008-09. EU Countries have emerged to be the top destination for India's Computer Hardware Exports during the year 2008-09. Export to EU Countries registered a growth of 61 percent (41 percent in US$ terms) during the year 2008-09 over the year 2007-08. In value terms, export of computer hardware to EU Countries is estimated to be Rs. 472 crore (US$ 103 million) up from Rs. 293 million (US$ 73 million) estimated in theyear2007-08. Export to Africa and Far East countries registered decline during the year 2008-09. Export of Computer Hardware to Singapore Hong Kong and other South Asian Countries registered a high growth

10 of 51 percent (47 percent in US$ terms) during the year 2009-10 making this region the top destination for India s export of Computer Hardware. In value terms, export of computer hardware to this region is estimated to be Rs. 569 crore (US$ 120 million) up from Rs. 376 crore (US$ 82 million) estimated in the year 2008-09. Export to Middle East countries, Africa and Far East countries registered growth during the year 2009-10. Export to North America, LAC and Oceanic countries registered decline during 2009-10. Table: 4 Changes in the direction of Computer Hardware Exports (Rs Crores) Destination 2002-03 2003-04 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Singapore, Hongkong & other South Asian Countries 208 (37.82) 647.18 (44.94) 220 (21.46) 83.5 (5.57) 147 (14.85) 375.92 (22.78) 569 (38.38) 499 (29.95) 400 (19.05) Europe (EU countries) 82 (14.91) 130.28 (9.05) 67 (6.54) 165 (11) 293 (29.6) 472.01 (28.61) 500 (26.32) 260 (20) 240 (11.43) North America 127 (23.09) Middle East countries Japan Korea other Far East Countries Australia & Other Ocean Countries 122 (22.18) 7 (1.27) African countries 2.56 (0.47) Russia and C.I.S countries Australia & Other Ocean Countries 0.3 (0.05) 1 (0.18) 453.6 (34.5) 118.43 (8.22) 25.7 (3.87) 28.72 (1.99) 1.1 (0.08) 1.8 (0.13) 511.5 (49.9) 44 (4.29) 165 (16.1) 12 (1.17) 0.5 (0.05) 3 (0.29) 1070 (71.33) 48 (3.2) 100 (6.67) 30 (2) 1.6 (0.11) 0.5 (0.03) 31 (3.13) 81 (8.18) 324 (32.73) 80 (8.08) 2 (0.2) 2 (0.2) 356.05 (21.58) 195.14 (11.83) 53.9 (3.27) 55.71 (3.38) 6.6 (0.4) 16.41 (0.99) 274 (14.42) 266 (14) 125 (6.58) 75 (3.95) 12 (0.63) 15 (0.79) 190 (14.62) 150 (11.54) 79 (6.08) 38 (2.92) 12 (0.92) 4 (0.31) 400 (19.05) 770 (36.67) 125 (5.95) 65 (3.10) 4 (0.19) 10 (0.48) Latin America 0 (0) 0 (0) 1 (0.1) 1 (0.07) 29 (2.93) 114.69 (6.95) 60 (3.16) 65 (5) 80 (3.81) Europe (Non EU 0.14 3.02 1 0.4 1 3.58 4 3 6 Countries) (0.03) (0.21) (0.1) (0.03) (0.1) (0.22) (0.21) (0.23) (0.29) Total 550 1440 1025 1500 900 1650 1900 1300 2100 Source: Electronics and Software Export Promotion Council (ESC), Statistical Year book, different Years Note: Figures in brackets show the Percentage of Sectoral Total Singapore, Hong Kong and other South Asian Countries remain the top destination for export of computer hardware from India. Export to all the regions except Latin America registered a declined in export during the year 2010-11.Middle East countries remains the top destination for export of Computer hardware from India in the year 2011-12. Singapore, Hong Kong and other South Asian Countries are second top exporters of computer hardware. But all the destinations of the percentage of sectoral total are declined compare with 2010-11.

11 Computer Software Services Company Total Export Rs. Lakh Table: 5 Top Exporters of Computer Hardware& Computer Software services in India 2006-07 2011-12 Computer Hardware Computer Software Services Computer Hardware Company Total Export Rs. Lakh Company Total Export Rs. Lakh Company Total Export Rs. Lakh 1TATA Consultancy Services 2.Infosys. Technologies 3.Wipro 4.Satyam Computer Services 5.HCL Technologies 6.IBM India Pvt. 7.Tech. Mahindra 8.Tech. Mahindra 9.Flextronics Software Services 10.I-Flex Solution 1355938.84 1.Celetronix India Pvt 1293418.07 2. L.G. Electronics India Pvt 926379.92 3.Celetronic Power India Pvt. 596116.0 4. VXL Instrument 459800 5. Samsung India Electronic 371460.05 6.Kobain Electronics India Pvt.Ltd 247683.48 7.Pan India Network Intrawest Pvt.Ltd 209956.02 8. Zenith Computers 163291.74 9.WEP Peripherals 150354.55 10. MIC Electronics 175.26 1.TATA Consultancy Services 3144854.0 1.Dell India Pvt.Ltd 59.32 2.Infosys BPO Ltd 6963.0 2.Honeywell Automation India 23.17 3. Cognizant Technology Solutions India Pvt.Ltd 6.80 4. Accenture Services Pvt. Ltd 5.89 5.IBM India Pvt. 3.82 6.Tech. Mahindra 3.05 7. Oracle Financial Services software Ltd 2.69 8. Larsen & Toubro InfoTech Ltd 2.13 9. Aricent Technologies 1.66 10. HSBC Software Development India Pvt. Ltd 2620.0 3.Prime Focus 2016.0 4.HCL Info system 694141.00 5.Simmatronics Semi Conductors 480013.0 6.Accel Frontline Services Pvt.Ltd 255888.0 7.L.G. Electronics India Pvt. 218174.0 8.Smartlink Networks Systems 146460.0 9.OPC Technology Japan Pvt. 134801.0 10.Sil-Kee Electronics Pvt. Source: Electronics and Software Export Promotion Council (ESC), Statistical Year book, different Years. 47697.21 13387.31 19635.44 2285.00 2227.59 1974.91 1617.90 793.98 446.22 405.40 MAJOR FINDINGS OF THE STUDY: A few of the Findings emanating from the study are: 1. India s lack of success in exporting computer hardware to the global market is deeply rooted to a variety of reasons which range from market dynamics to inadequacy of support policy initiatives. 2. Low level of technology. 3. Poor basic infrastructure. 4. Long business cycles. 5. Inadequacy of domestic investment, inability to attract foreign investment, mega investments from multinational companies. 6. Lack of large scale manufacturing, and competitive product pricing. 7. Lack of strong domestic market growth trends. 8. Lack of decent profit margins. 9. Lack of international branding. 10. Inadequate promotional activities. 11. Absence of strategic market plan.

12 12. Lack of initiatives for new product development. 13. Inadequate investment in research and development. 14. Lack of global strategic partnerships. 15. Lack of Indian grey market and lack of Indian brand recognition. SUGGESTIONS: A few of the Suggestions emanating from the study are: We need effective Govt. policy, managerial attitudes and cyber-savvy leaders to encourage high risk, long term investment. Comprehensive curricula must be put in place to cater to the demands of the emerging technologies and changing needs of the industry. Industry-Academia collaboration has to be strengthened. Specific IT graduation focusing on Industry needs can be introduced after 10+2. Software education centers like NIIT, APTECH, SSI, etc. must launch up -to date courses keeping pace with the present demands at home and abroad. Easy access to educational loan to the students of IT courses should be provided. A national level test just like All India Engineering and Medical Entrance Examination can be conducted to tap the young talents to the IT industry after 10+2. Special attention must be paid to the marketing and brand building. Overcoming infrastructural bottlenecks like uninterrupted power supply, communication facilities are the need of the hour. Broader basening of our overseas software market, concentration on high end software products, more regional diversification of software industry, diffusion of the information technology to the domestic market etc. are the need of the hour. More private participation, both domestic and foreign, is crucial for providing high quality power supply and communication facilities like high band width. Efforts must be paid to tap the best talents of Indian software experts for promoting the original software like Windows by investing more on Research and Development (R&D), providing facilities of international standards and by paying attractive salary. There is also a need to attract substantial amounts of Foreign Investment and Technology to rejuvenate Indian IT Industry and make it more competitive globally. An influx of foreign capital and Technology would expose Indians to the latest technologies. Last but not least, making available cheap hardware by reducing excise duty, sales tax can go a long way to provide a growth spurt to the Industry. Government of India and the Indian Computer Hardware manufacturers have to work in tandem, and take some proactive initiatives. The initiatives to be taken by the Government of India include: (i) Identification of a vision and strategic growth plan.(ii) Reducing operational costs of manufacturing and improving business attractiveness. (iii) Promoting single manufacturing clusters. (iv) Promoting R&D activities and human resource development. (v) Promoting India as an ideal destination for Computer Hardware manufacturing.(vi) Promoting anchor investment in Indian Computer Hardware industry. (vii) Relaxation of Labour Laws. (viii) Identification of thrust areas and development of incubators. (ix) Skill development.(ix) Pro-active policies for development of entrepreneurship in hardware sector like software. CONCLUSION: From the foregoing analysis, it is clear that software and hardware an area which will work as a catalyst to make India a Global IT Super Power. Over the years Software has been growing at high rate of over 45 per cent. The share of software export in total export as well as its contribution to GDP has steadily increased over the years. That software sector has emerged as a foreign exchange earner and generator of large scale employment opportunities. India is one of the fastest-growing IT systems and hardware market in the Asia-Pacific region. Most of the prominent global vendors and some locals have strong presence in the Indian market. Most MNCs have their assembly units in India. So the Computer Hardware and Computer Software Sectors are very important for development of Indian Economy. REFERENCES: [1] A Brief Report on Electronics Industry in India, Corporate Catalyst India, August 2012. [2] Electronics and Software Export Promotion Council (ESC), Statistical Year book, different Years. [3] Arora, A. and S. Athreya (2002) The Software Industry and India s Economic Development, Information Economics and Policy, 14(2): 252-273. [4] Arora, A., V. S Arunachalam, J. Asundi and F. Ronald (2001) The Indian Software Services Industry, Research Policy, 30 (8): 1267-87. [5] Asheref Illiyan Performance, Challenges and Opportunities of Indian Software Export, Journal fo Theoretical and Applied Information Technology, pp: 1088-1103. [6] Athreye, S. (2005), The Indian Software industry and its evolving service capability, Industrial and Corporate Change, Vol. 14(3), 2005: 393-418. [7] Electronics and Software Export Promotion Council (ESC), Statistical Year book, different Years [8] Economic Survey (2006-07), Government of India. [9] Eleventh Five Year Plan (2002-07), Information Technology Sector. [10] Government of India (2012), Economic Survey, Ministry of Finance, New Delhi [11] Heeks R., (1996) India s software industry, state policy, liberalization and industrial Development. New Delhi: Sage Publications

13 [12] Joseph, K.J. (2005), Strategic Approach to Strengthening the International Competitiveness in Knowledge Based Industries: Electronics Industry RIS-P#88/2005 RIS, New Delhi. [13] Kumar (2006), World Electronic Component Production Scenario: An Indian Perspective Electronics Information and Planning, Vol 33, 3 4, Dec2005-Jan-2006, Dept.of IT, Government of India. [14] K J Joseph India s Software Industry in Transition, May 2012, A Background Paper Prepared for the Information Economy Report 2012. [15] Ministry of Communications & Information Technology, Information Technology Annual Report 2007-08 & 2008-09, Department of Information Technology. [16] Productivity & Competitiveness of Indian Manufacturing IT Hardware & Electronics Sector. National Productivity Council, New Delhi. [17] Sanjay K Singh. Information Technology in India: Present Status and Future Prospects for Economic Development.