Bangalore: Urging a need for rapid growth in domestic hardware manufacturing, IT Czar and Wipro Chairman Azim Premji on August 22 said that a nation cannot be self-sufficient in strategic sectors like Defence, Nuclear Energy and Space Technologies without domestic capabilities in hardware development and manufacturing.

"We still are denied access to high-end components by the US in areas of Defence and Space," Premji told chartered accountants in Bangalore at a "technology conference on Harmonizing IT power- CAs perspective" organised by the Institute of Chartered Accountants of India (ICAI).

Stating that IT provided us with a once-in-lifetime opportunity to build a developed nation, he said India had the potential to be a global electronics hardware manufacturer.

"The tremendous economic growth that China has witnessed in the recent decade has been fuelled to a large extent by the growth in hardware industry there. China exported hardware worth $ 36 billion in 2001 and is the world's third largest electronics hardware manufacturer. From a potential point of view, India is well placed too," Premji, a member of the National Task Force on hardware, said.

He said India's PC penetration in 2002 was 9 per 1000 as compared to 34 per 1000 in China and hardware consumption in India currently is $ four billion.

Quoting a MAIT report, Premji said, this had a potential to multiply by 11 times to $ 44 billion in 2010 and hardware exports, which is currently $ 300 million, can go up to $ 18 billion by 2010.

Premji said the hardware sector could employ SSC, ITI or Diploma holders, providing another avenue for employment to millions.

"It is estimated that this sector can generate over 1.2 million such employment opportunities by 2010," he said, adding the government was finally showing attention in the sector.

On the recent uproar against outsourcing to India by US IT firms, Premji said, these reactions are but natural as the economy goes through a fundamental shift.

But the economic reality of outsourcing is different. US economy is projected to save about $ 11 billion from outsourcing to India in the current year, he said.

He said Indian IT professionals in the US spend $ 1.2 billion contributing to the domestic economy there, besides Indian firms paying over $ 350 million to US social security in 2002-03 and this amount is expected to cross $ one billion in the next few years.

"Compare these benefits to the fact that by 2010, IT jobs outsourced to India will be a mere seven per cent of the total IT jobs projected by the US department of labour," he said.

Stating that outsourcing is no longer a choice but an absolute strategic necessity, Premji said, it is clear that economies and demographics dictate that IT services will be outsourced to the locations that are best suited globally --that is to India and other comparable economies.

PTI