International Journal of Management and Social Sciences Research (IJMSSR) ISSN: 2319-4421 Volume 2, No. 7, July 2013
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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-electronics-
based 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
International Journal of Management and Social Sciences Research (IJMSSR) ISSN: 2319-4421 Volume 2, No. 7, July 2013
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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.
International Journal of Management and Social Sciences Research (IJMSSR) ISSN: 2319-4421 Volume 2, No. 7, July 2013
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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
International Journal of Management and Social Sciences Research (IJMSSR) ISSN: 2319-4421 Volume 2, No. 7, July 2013
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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 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
99040
134600
183000
222010
285064308150
341200
8800 10800 12800 15870 13490 14430 14970
0
50000
100000
150000
200000
250000
300000
350000
400000
Production of Computer Hardware& Software Services
Computer Software& Services(Rs Crores)
Computer Hardware(Rs Crores)
International Journal of Management and Social Sciences Research (IJMSSR) ISSN: 2319-4421 Volume 2, No. 7, July 2013
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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.
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.
5800
77300
105000
146000
175000
227834241950
262500
1440 1200 1025 1500 990 1650 1900 13000
50000
100000
150000
200000
250000
300000
Exports of Computer Hardware& Software Services
Computer Software& Services(Rs.Crores)
Computer Hardware(Rs. Crores)
International Journal of Management and Social Sciences Research (IJMSSR) ISSN: 2319-4421 Volume 2, No. 7, July 2013
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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
1687.95
(3.63)
1950
(3.36)
2381.4
(3.08)
2800
(2.67)
4500
(3.08)
6500
(3.71)
6493.27
(2.85)
8000
(3.31)
8400
(3.2)
Europe (EU
countries)
10597.35
(22.79)
14549.7
(25.09)
21146.9
(27.36)
27000
(25.71)
39420
(27)
46725
(26.7)
69489.37
(30.5)
75800
(31.33)
81800
(31.16)
North America 29657.7
(63.78)
35777
(61.68)
47222.7
(61.09)
65200
(62.1)
90109.47
(61.72)
107625
(61.5)
133100.6
(58.42)
136800
(56.54)
147000
(56)
Middle East
countries
692.85
(1.49)
681
(1.17)
1197.82
(1.55)
1300
(1.24)
2259.81
(1.55)
2292.5
(1.31)
6835.02
(3)
6200
(2.56)
7875
(3)
Japan Korea& other
Far East Countries
Australia & Other
Ocean Countries
2064.6
(4.44)
3110
(5.36)
2639.7
(3.41)
3200
(3.05)
3314.2
(2.27)
4900
(2.8)
2734.01
(1.2)
3100
(1.28)
3413
(1.3)
African countries 637.05
(1.37)
621.58
(1.07)
1236.95
(1.6)
2200
(2.1)
710
(0.49)
1000
(0.57)
2278.34
(1)
2700
(1.12)
3150
(1.2)
Russia and C.I.S
countries
4.65
(0.01)
2.31
(0)
0.58
(0)
25
(0.02)
92.89
(0.06)
122.5
(0.07)
18227
(0.08)
250
(0.1)
886
(0.34)
Australia & Other
Ocean Countries
632.4
(1.36)
748.57
(1.29)
1100.52
(1.42)
425
(0.4)
2460.82
(1.69)
2975
(1.7)
3873.18
(1.7)
4100
(1.69)
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 2nd, 3rd, 4th,
5th, and 6th 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
International Journal of Management and Social Sciences Research (IJMSSR) ISSN: 2319-4421 Volume 2, No. 7, July 2013
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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)
453.6
(34.5)
511.5
(49.9)
1070
(71.33)
31
(3.13)
356.05
(21.58)
274
(14.42)
190
(14.62)
400
(19.05)
Middle East
countries
122
(22.18)
118.43
(8.22)
44
(4.29)
48
(3.2)
81
(8.18)
195.14
(11.83)
266
(14)
150
(11.54)
770
(36.67)
Japan Korea other
Far East Countries
Australia & Other
Ocean Countries
7
(1.27)
25.7
(3.87)
165
(16.1)
100
(6.67)
324
(32.73)
53.9
(3.27)
125
(6.58)
79
(6.08)
125
(5.95)
African countries 2.56
(0.47)
28.72
(1.99)
12
(1.17)
30
(2)
80
(8.08)
55.71
(3.38)
75
(3.95)
38
(2.92)
65
(3.10)
Russia and C.I.S
countries
0.3
(0.05)
1.1
(0.08)
0.5
(0.05)
1.6
(0.11)
2
(0.2)
6.6
(0.4)
12
(0.63)
12
(0.92)
4
(0.19)
Australia & Other
Ocean Countries
1
(0.18)
1.8
(0.13)
3
(0.29)
0.5
(0.03)
2
(0.2)
16.41
(0.99)
15
(0.79)
4
(0.31)
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
Countries)
0.14
(0.03)
3.02
(0.21)
1
(0.1)
0.4
(0.03)
1
(0.1)
3.58
(0.22)
4
(0.21)
3
(0.23)
6
(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.
International Journal of Management and Social Sciences Research (IJMSSR) ISSN: 2319-4421 Volume 2, No. 7, July 2013
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Table: 5 Top Exporters of Computer Hardware& Computer Software services in India
2006-07 2011-12
Computer Software
Services
Computer Hardware Computer Software Services Computer Hardware
Company Total
Export Rs.
Lakh
Company Total
Export Rs.
Lakh
Company Total Export
Rs. Lakh
Company Total
Export
Rs. Lakh
1TATA
Consultancy
Services Ltd.
1355938.84 1.Celetronix
India Pvt Ltd.
175.26 1.TATA
Consultancy
Services Ltd.
3144854.0 1.Dell India
Pvt.Ltd
47697.21
2.Infosys.
Technologies
Ltd.
1293418.07 2. L.G.
Electronics
India Pvt Ltd.
59.32 2.Infosys BPO Ltd 6963.0 2.Honeywell
Automation
India Ltd.
13387.31
3.Wipro Ltd. 926379.92 3.Celetronic
Power India
Pvt.Ltd.
23.17 3. Cognizant
Technology
Solutions India Pvt
.Ltd
2620.0 3.Prime Focus
Ltd.
19635.44
4.Satyam
Computer
Services Ltd.
596116.0 4. VXL
Instrument
Ltd.
6.80 4. Accenture
Services Pvt. Ltd
2016.0 4.HCL Info
system Ltd.
2285.00
5.HCL
Technologies
Ltd.
459800 5. Samsung
India
Electronic
Ltd.
5.89 5.IBM India
Pvt.Ltd.
694141.00 5.Simmatronics
Semi Conductors
Ltd.
2227.59
6.IBM India
Pvt.Ltd.
371460.05 6.Kobain
Electronics
India Pvt.Ltd
3.82 6.Tech. Mahindra
Ltd.
480013.0 6.Accel Frontline
Services Pvt.Ltd
1974.91
7.Tech.
Mahindra Ltd.
247683.48 7.Pan India
Network
Intrawest
Pvt.Ltd
3.05 7. Oracle Financial
Services soft-
ware Ltd
255888.0 7.L.G. Electronics
India Pvt.Ltd.
1617.90
8.Tech.
Mahindra Ltd.
209956.02 8. Zenith
Computers
Ltd.
2.69 8. Larsen & Toubro
InfoTech Ltd
218174.0 8.Smartlink
Networks
Systems Ltd.
793.98
9.Flextronics
Software
Services Ltd.
163291.74 9.WEP
Peripherals
Ltd.
2.13 9. Aricent
Technologies
146460.0 9.OPC
Technology Japan
Pvt.Ltd.
446.22
10.I-Flex
Solution Ltd.
150354.55 10. MIC
Electronics
Ltd.
1.66 10. HSBC Software
Development India
Pvt. Ltd
134801.0 10.Sil-Kee
Electronics
Pvt.Ltd.
405.40
Source: Electronics and Software Export Promotion Council (ESC), Statistical Year book, different Years.
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.
International Journal of Management and Social Sciences Research (IJMSSR) ISSN: 2319-4421 Volume 2, No. 7, July 2013
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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.
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International Journal of Management and Social Sciences Research (IJMSSR) ISSN: 2319-4421 Volume 2, No. 7, July 2013
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