Computer manufacturers, who rely heavily on imported parts, have begun raising prices in response to the weakening rupee and are warning of more pain if the Indian currency does not recover.
In addition to further price increases, PC makers have said sales growth could be stunted as consumers put off a decision on buying devices. For the Rs 70,000-crore hardware industry, it will be a double whammy after they struggled to deal with supply shortages caused by floods in Thailand.
If the rupee continues at these levels, prices could go up further," said Amar Babu, managing director at the Indian arm of Lenovo, the market leader. The Chinese-owned company raised prices by 3-5 % last month.
The rupee has been the worstperforming Asian currency, recording an 18% fall since late January. "Nobody can sustain with the old prices," said S Rajendran, chief marketing officer at the Indian arm of Taiwanese company Acer.
In a panic, hardware companies under the umbrella of the Manufacturers' Association of Information Technology (Mait) have petitioned the government to cut duties temporarily and renegotiate contracts that were signed before the rupee went into a tailspin.
Demand from the government makes up nearly half of the Indian PC market where as many as 12.5 million units — including desktops, laptops and tablets — are expected to be sold this year. The latest order from the Tamil Nadu government to procure close to a million computers was expected to give a significant fillip to PC sales in the country .
Many more such orders are in the pipeline. "The industry has been bleeding for the last three months. All IT hardware companies are in the red regardless of whether they are domestic manufacturers or multinationals as the industry has over 85% import content," Mait said in a statement on Tuesday.
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