NEW DELHI, Feb 8: The US-based $8-billion Sun Microsystems Inc has received government clearance to set up a wholly-owned subsidiary in the country. The approval has a rider attached: it asks the local subsidiary not to undertake manufacture of computer software initially.Official sources said that at a recent meeting, both the Foreign Investment Promotion Board and department of electronics supported the proposal. It is learnt that the proposal was recommended for approval of the industry minister "because of the proprietary nature of technology and the standing of the company in the industry".
Sun Microsystems' subsidiary will undertake marketing and distribution of its hardware and software products. At present, Sun Microsystems has a liaison office in the country. The proposed subsidiary is expected to be headquartered in Bangalore, will house a technology, consulting and marketing centre which will service customers in India and neighbouring countries.
Sun sells its range of hardware and softwaresolutions through distributors including Wipro Infotech, Fujitsu ICIM and Tata Infotech Ltd at present. The company is a world leader in workstation sales with 35 per cent revenues from this business. The Indian subsidiary will also establish a technical and marketing centre that would provide support services to overseas Sun entities. The company would also be involved with educational training and consulting including the sale or license of training materials, products and associated documentation. Sources said that the company would also undertake system integration services. The proposed foreign equity is 100 per cent which would amount to $500,000 to start with. The company has projected exports of over $10 million in five years.
Sun Microsystems Inc is a manufacturer of UNIX-based professional workstations and software as well as micro computer chips. The company has averaged 15 to 20 per cent growth over the last several years. Sun Microsystems Inc, founded in 1982, is also involved in networkingproducts to computing equipment.
Another company, Trilogix Systems Pvt Ltd has also got FIPB nod for substantial expansion of the existing software technology park unit for development of computer software. The proposed NRI/OCB equity is 74 per cent amounting to Rs 3.7 lakh on a repatriable basis. The company is targeting an export turnover of Rs 510 lakh ($1,42,000) in five years. The department of electronics has also supported the proposal.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
