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Zero Duty: Channel Seeks Clarity Computers Articles | January 27 Reshad Jones Jersey , 2005
Back in June this year, when 360 Magazine first mooted the question about the impact zero duty will have on the Indian IT ... most just shrugged it off. For most ... and ... t


Back in June this year, when 360 Magazine first mooted the question about the impact zero duty will have on the Indian IT industry, most just shrugged it off. For most manufacturers and distributors this was something too far off in the future to worry about. But 360 Magazine?s Anniversary issue on the topic did set the industry thinking. This time round when we spoke to industry leaders, the reaction was expectedly
different.
With WTO?s zero duty regime now looming large over the horizon, industry leaders are a worried lot. Confusion is the order of the day with even the most optimistic industry leader sounding befuddled about the scenario that will emerge.
360 Magazine decided to put things in perspective by putting the spotlight on the benefits that will accrue while highlighting the areas of confusion.

Implications
The positive aspect of the move is there for all to see. The market will explode. More global brands will now foray into the Indian market. And thanks to this increased competition Michael Deiter Jersey , prices will fall and PC penetration will rise substantially. According to Aditya Bhuwania, director, Priya Group, ?The customer segment that initially opted for refurbished PCs can now afford a new one, as the price difference would be marginal.?
Industry veterans expect zero duty to not only opens up the market but also iron out inefficiencies in the distribution system. This will bring in more structure into the way the business is now managed. Says Suresh Pansari, managing director Christian Wilkins Jersey , Rashi Peripherals, ?While market size will increase, manufacturers will have to offer more benefits and schemes to attract end-users.?
Most manufacturers have been giving the best possible prices to India. Some have even been subsidizing. This opens up the possibility of developing India as an export hub. But Pansari feels that the government needs to take more positive steps like rationalizing the tax structure since India can develop itself as an export port to neighboring countries as well as the Far East markets.
While gray market dominance has been on the decline, zero duty is expected to be the final nail in the coffin. Says Rajshekhar Bhatt, Sales & Marketing Manager, Creative Technology Minkah Fitzpatrick Jersey , ?Since service plays an important role in India it would discourage customers from the gray market products, as zero duty would do away with the cost advantage the unofficial channel currently enjoys.?
Even the official channel will have to contend with issues like thin margins, over distribution and heavy competition. Other than this, the industry also faces issues like inverted duty structure, as basic raw materials and dual usage items attract higher customs duty than finished goods. Says K. R. Naik, chairman and MD Dan Marino Jersey , Dlink, ?The obsolescence rate of IT products is high. The issue gets compounded when factors like high cost of capital, energy and other infrastructure deficiencies are taken into account.?

Affected Manufacturers
While things look rosy for the end-user, indigenous manufacturers are not so happy with the turn of events. While the actual implications can only be gauged post budget 2005, most domestic manufacturers are worried about losing the price advantage, which they now hold Custom Miami Dolphins Jerseys , as zero duty will provide a level playing field to international brands.
Low cost of manufacturing is the single biggest advantage India has to offer to the world. Also, India is centrally located between manufacturing nations like China and Taiwan and major markets like Europe, Africa and West Asia. India could be developed into a base for hardware outsourcing and supply to these markets. For this, India needs to focus on developing world-class logistics and bringing down transaction time down to international levels. Says Naik, ?Infrastructure required for hardware manufacturing need to be improved and manufacturing-friendly policies need to implemented by the government to encourage domestic manufacturing.?
Another factor that has proved a dampener is India?s local market. Most manufacturers are reluctant to invest in the country, as internal volumes don?t justify the costs involved. Says J. Kulkarni Throwback Miami Dolphins Jerseys , CEO, Redington, ?The cost of manufacturing is lower in India than in either Malaysia or Taiwan. But the domestic volume has to go up before indigenous manufacturing actually takes off. Manufacturing is linked to duty becoming zero, domestic market size and business friendly customs processes.?
India?s archaic customs laws and unpredictable government policies has also served to discourage potential investors. But issues related to duty on warranty products will now be sorted out.
But Bhuwania says, ?The belief that manufacturing in India is cheaper is a myth. While labor costs are lower, India loses out where productivity is concerned.? According to him Authentic Miami Dolphins Jerseys , in China, the estimated cost of packaging and manufacturing a motherboard is Rs 150 on the manufacturing side, India lost the battle a long time ago. Only the government can now take steps to alter this status quo.
Sujay Chohan, vice president-research director, Gartner India puts things in perspective. Says he Miami Dolphins Jerseys For Sale , ?India was never a manufacturing destination. What we call manufacturing is actually assembling of imported components. Hence, zero duty won?t . Cheap Jerseys Cheap Jerseys From China Cheap Jerseys China Online Cheap Jerseys China Online Cheap Jerseys From China Wholesale T-Shirts Wholesale Adidas NHL Jerseys Wholesale Collge Hoodie Wholesale Nike NBA Hoodie Wholesale Baseball Jerseys