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May 25, 1998


Hardware is hard to do

First HP drops India as manufacturing base. Now Wipro fails
to set up a printer plant. Should we hit the panic button?

Email this story to a friend. A staff writer in Bombay

The Wipro Infotech group's plan to pioneer the manufacturing of inkjet printers in the country has come a cropper because it has not been able to secure the technology for making 'print heads', a critical component in any inkjet device.

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This follows a similar attempt less than a year ago by Hewlett-Packard. In July 1997, the multinational had rejected the proposal of its Indian subsidiary for setting up a $ 400 million manufacturing unit in India to produce the 'inkjet pen', a high-tech component in non-impact printers.

One of the main reasons HP cited for the cancellation of the HP project was poor infrastructure and various bottlenecks restricting timely import of raw materials and export of finished products. HP had, instead, shortlisted China and Malaysia for the same project.

But that was one year ago. Since then the Manufacturers Association for Information Technology has drawn up huge plans for making India not only the IT design centre of the world but also a formidable base for hardware manufacturing.

Yet the Wipro Infotech group's difficulty in getting the 'printer head' technology transferred to its plants must ring alarm bells about the global perception of India's viability as an IT manufacturing base.

Unnamed sources in Wipro have revealed to the press that Wipro had initiated talks with almost all major inkjet printer manufacturers like Canon, Epson and HP.

"While they offered us only partial technology, we wanted only transfer of full technology... Without transferring technology for print heads, domestic manufacturing will be quite impossible," the sources have been quoted as saying.

Following revival of talks with Canon last year, Wipro had planned to manufacture inkjet printers at its Mysore factory with an initial investment of Rs 5 million.

Wipro has a deal with Canon of Japan, which enable the sale of inkjet printers in India under the 'Wipro Genius' brand name. It was expected that the deal would be extrapolated to Wipro's manufacturing plans.

In fact, Wipro had redrawn its manufacturing plans for 1997-98 as part of a reoriented strategy following the announcement of the last Union Budget.

The Budget had slackened the restrictions imposed by the 'minimum alternative tax' on export oriented units among other concessions granted to the domestic manufacturing sector.

As immediate fallout of the Budget, Wipro had decided to revive its earlier plans to indigenously manufacture inkjet printers in collaboration with Canon of Japan.

Even this idea was put on hold the previous year following drastic import duty reductions announced in that year's Budget which made domestic manufacturing unfavourable.

However, Wipro decided to go back to Canon and, "talk it over once again".

The company had drawn up some manufacturing plans before 1996-97 but had to stall all those activities because of the 1996 Budget, which had made domestic manufacturing unattractive.

However, following the 1997 Budget, Wipro had announced the taking up a good amount of manufacturing activities.

Now, Wipro and Hewlett Packard have announced a deal for distribution of HP's range of laser printers and deskjets in India!


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