India's PC sales take a dive

NEW DELHI, India -- Sales of personal computers in India dropped 3.8 percent for the first half of the current fiscal year.

The slump is triggering calls for help from the computer industry, including pleas for a tax cut in next month's budget.

A weak economy has hit the Indian computer hardware market, and the industry is seeking tax relief in the upcoming federal budget.

In some parts of Asia, however, lower prices and stronger than expected consumer demand have boosted PC sales, especially in mainland China.

Chipmaker Hynix Semiconductor cited strong PC demand in China when it raised chip prices last week.

Full-year forecast trimmed

Indian trade group MAIT reported Tuesday that sales fell to 803,055 PCs in the six months through September 2001. That's down from 834,650 the same period a year earlier.

"The severe recessionary trend in the Indian economy has adversely impacted the hardware market and based on the poor buying sentiment in the market, the sales projections for 2001/02 have been revised," the statement said.

MAIT said it had trimmed its sales forecast for the full year to 1.65 million units, from 2.45 million.

PC sales grew 34 percent in the year ended March 2001, over the previous fiscal year.

The professional group added that the assembled PC market, made up of smaller and lesser known regional brands and unbranded systems, took the biggest hit.

Seeking a tax cut

MAIT urged the government to cut sales tax and excise duties, and to boost spending on PCs to help the industry rebound.

MAIT also asked the government to scrap customs duties on all capital goods for IT, telecom and electronics manufacturing in its budget for the next fiscal year, due out next month.

The industry is also looking for duties to be ditched on all input raw materials and components.

PC sales have been slumping throughout most of the Asia Pacific region. But research group IDC expects PC sales in mainland China to remain robust.

China sales are expected to see an 18 percent spike to 4 million computers in the first half of the year, from 3.4 million units a year ago.

The Mainland is also expected to surpass Japan as Asia's biggest PC market by 2003, on track for sales of up to 13.2 million units.

Overtaking Japan would make China the world's number-two computer market after the United States.

Reuters contributed to this report.