The Manufacturers' Association of Information Technology (MAIT), an industry monitor, predicted domestic PC sales in the first half of the current financial year to March could top 1.4 million units.

April-June sales hit 640,000 units with the cheap, locally-assembled models cornering 65 percent of the domestic market, it said.

"The earlier projection of 1.2 million units in sales for the first half (to September) has been revised upwards in light of buoyant business sentiment," MAIT said after a survey sales in 13 of India's largest cities.

Sales in India's PC market rose 37 percent to 2.3 million units in the financial year ending March 2003.

"The growth in PC sales can be attributed to increased IT consumption by industry and corporate sectors such as telecommunications, banking and financial services, manufacturing and IT-enabled services," MAIT said.

It said India's PC market could sell 2.7 million units in 2003-2004 but warned that global brands would make a mark only if New Delhi lowered duties on branded hardware.

"The buoyant IT consumption witnessed last year continues undiminished and with robust growth prospects the market is expected to grow 18 percent in 2003-2004 over last year," MAIT said.

MAIT chief Vinnie Mehta said the industry was concerned at the market dominance of cheaply-available computers assembled in homes and in alleys around the country.

"The growing (share) of the assembled and unorganised PC market is of immense concern to us," Mehta said, adding that the trend could be reversed only if New Delhi enforced a recently-introduced draft policy for the IT hardware sector.

"The policy aims to set right the existing anomalies in the duty structure, incentivising IT manufacturing and growing the domestic market," Mehta said.

The industry believes the enforcement of the policy, which proposes a cut in excise and removal of additional duty, could bring down hardware costs by up to 20 percent.

Mehta said lower taxes will also accelerate the growth of IT-enabled services in India.

"To ensure that IT reaches grassroot levels in India, there is a pressing need to bring down the prices of IT products.

"MAIT has recommended bringing down all levies, especially excise duty, from the existing 16 percent to eight percent and should that happen, the domestic market can grow comfortably by 50 percent per annum for the next few years," he said.

"Lowering of domestic taxes will also enable the organised sector to offer prices comparable to the unorganized sector," Mehta added.

India's software industry, meanwhile, has grown 26.3 percent to 9.5 billion dollars in the year to March -- narrowly missing the 30 percent growth target set for the period.

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