The Information Technology industry in the State is upbeat over the guidelines on “go local policy” notified by the Union IT Ministry.

The latest guidelines, cleared after much opposition from the US and European companies, specify that 30 per cent of all equipment supply contract will be reserved for companies with local manufacturing base.

Though restricted to Government contracts initially, the provision is likely to be extended to private sector as well wherein the quota for locally made hardware will increase over the next few years.

For a State which is the fourth largest exporter of software, the policy guidelines come as a blessing in disguise as it had not seen any significant growth in the hardware sector in spite of the incentives offered in the form of setting up of exclusive hardware and semiconductor parks. The State’s IT exports during 2011-12 crossed the Rs. 50,000 crore with direct employment figures pegged at 3.1 lakh.

The IT exports, however, are not likely to keep pace this year, not because of the decline in business, but because of the frequent fluctuations in the exchange rates that has hit the companies. Industry representatives feel that the policy will give fillip to promotion of manufacturing equipment locally that will, in turn, address concerns related to entry of spyware into the country.

Cyber hacking has been a major concern for the IT services providers and this will be addressed to a large extent with the promotion of locally made goods which will be approved after incorporating necessary safeguards. “This is a good incentive for the local hardware manufacturing companies. You cannot keep on incentivising firms to ensure promotion of hardware manufacturing facilities,” IT expert and TalentSprint executive chairman J.A. Chowdary said.

The latest policy augurs well for local manufacturing companies and it is in line with the National Manufacturing Mission announced by the Centre. There are, of course, security concerns when it comes to equipment related to telecommunication which is a sensitive area, but every country is designing its own framework of policies to address the issue, he told The Hindu .

According to IT and IT enabled Services Industry Association president V. Rajanna, the proposed policy, if implemented in letter and spirit will motivate the multinational companies to set up shop here. “We have become one of the largest exporters of software, but are still to make any headway when it comes to hardware,” he said.

IT Department Secretary Sanjay Jaju was cautious in his reaction when he said it was too early to assess the impact of the latest policy. He, however, said the initiative was good for local manufacturing firms and the State would consider adopting its own policy on promotion of local manufacturing base once the success of the Centre’s decision is seen.