"We will see the large-scale manufacture of hardware in India in the next two to three years," Arun Shourie told a telecommunications conference.

Sales in India's personal computers market rocketed 37 percent to 2.3 million units in the financial year ending March 2003, matching the estimated growth of between 30 and 40 percent of the domestic software industry.

Some three million personal computers are likely to be sold in the current year, according to the Manufacturers' Association of Information Technology, the hardware industry body.

The growth in India's hardware sector had been hobbled for years by archaic rules that made manufacturing costlier than imports but recent duty cuts by the government have removed these obstacles.

India's Business Today magazine has predicted the domestic hardware market could be worth 750 billion rupees (16.5 billion dollars) in the next three years due to the rapidly growing communications and entertainment market.

Shourie said new technologies were set to accelerate growth in the burgeoning domestic communications market, including a common Internet and telephone box and an extensive fibre-optic cable network.

He said a low-cost satellite dish was also likely to be launched by private firms to tap booming domestic demand for cable television.

The number of mobile telephone subscribers is expected to grow by nearly 30 percent to 36 million this year, volumes which will make large-scale domestic manufacturing more viable than imports, he added.

Separately, global information technology analyst group Gartner forecast Tuesday the number of mobile telephone subscribers will exceed fixed-line customers this year with nearly a doubling of cellular penetration.

The number of cellular connections will grow by 96 percent to 56 million by the end of 2004 from the previous year, it said.

"This is a far cry from perceptions in India a decade ago when mobile phones were regarded as luxury items that had little relevance to the development of the country's telecommunications infrastructure," it said in a statement.

Nearly 50 million set-top boxes are also set to be added to Indian homes in the next five years for watching pay television channels, Shourie said.

Shourie said India was also set to emerge as an important research and development centre for open-sourced software -- programmes whose licences give users the freedom to use and change them without having to pay royalties.

He added the trend will boost the domestic information technology software industry which is smaller than IT software exports.

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