Indian IT Hardware Industry can lose Rs. 1000 crore: MAIT

The Manufacturers’ Association for Information Technology (MAIT) has said that the Indian electronics market is set to suffer a major slump in fiscal 2013-14 and Industry may lose over Rs 1,000 crore if the government fails to extend the April 3rd deadline of Compulsory Registration Order 2012.

Welcoming the government order that makes it mandatory for all manufacturers to get their electronic products certified for compliance with BIS standards, MAIT said that though the companies were ready to comply with these standards and tests, the government needs to address the issues faced by the Industry in meeting the deadline.

The Electronics and Information Technology Goods (Requirement for Compulsory Registration) Order 2012 has put a blanket ban on the sale of certain electronic products unless they meet the standard specified by BIS. The government order lists products under 15 categories ranging from video games, laptop, notebook, tablet and plasma/LCD/LED televisions, to microwave, printers and scanners, telephone answering machines, electronic music systems, etc.

Demanding an extension of the deadline by a minimum six months, MAIT warned that if the government does not pay heed to its advice, there would be a supply crunch in the market and the already troubled IT Hardware Industry would suffer huge losses.

Since the announcement of this Order in October 2012, the government has been sending notifications and clarification from time to time and last of such clarification was issued as late as the second week of March 2013, creating absolute confusion in the Industry.  Besides, the country does not have sufficient number of labs to test these products with the fifth (5th) such facility being notified by the government as late as the 3rd week of February 2013.

Around 8,000 products are to be tested from an average five factories each and these labs take around 4 to 6 weeks to test one product. On the basis of the current testing capacity, which is 500 products in a month, the time required to get certificates for each product is fairly long and the deadline of 3 April 2013 set by the government is completely unrealistic. Besides, neither the government nor the private labs are able to commit specific duration to test these products. In view of these circumstances, the Industry feels there is a need to extend the deadline, MAIT said.

The Industry body also highlighted that the test labs need time to understand the products and formulate testing standards and documentation of various categories of equipment. Test labs would certainly take time to catch up the sudden high inflow of products to meet the deadline. There is also a need for simplification of the process of certification of the same product or products with the same item number from different factories, MAIT said pointing out that the DeitY had earlier agreed to consider this.

Pointing out that the last fiscal was not good for the IT hardware Industry, MAIT warned that this unplanned high cost of testing the products and meeting the deadline will certainly hamper the consumer’s interest. The manufacturers and distributors will not just miss their billing targets in April, companies will be forced to postpone their delivery deadlines resulting in further revenue loss with the penalties, overheads etc adding more to the current sad state of the industry.

18-Mar-2013 12:27:06