Dell lowers prices by 11%

US-based Dell announced an 11 per cent reduction on listed price on select configurations of servers, desktops, workstations and notebooks. The announcement from Dell has come even as domestic vendors are still mulling over the impending reduction in hardware prices enabled by the customs and excise duty cuts in the mini-Budget.

"Since the announcement of the new rates, we have been able to pass these savings immediately to our customers. Other vendors may have to work through accumulated inventory taxed under the old regulations," said Dinesh Pai, general manger of Dell India. Dell is in a position to cut prices with immediate effect as they operate on a built to order basis and thus do not have any inventory backlog to be cleared.

Even though domestic vendors such as Wipro, HCL, Zenith are expected to be the biggest beneficiaries of the duty cuts in the mini-Budget, most of the them are still working out the benefit they will be able to pass on the benefits to the consumers.

"MAIT has advised us to hold on for a while as some ambiguities are being worked out," said Devita Saraf of Zenith Computers.

HCL too is playing the wait and watch game. "A consortium of vendors has approached Arun Shourie, Union minister of information technology to clear some grey areas in the budget. We are still figuring out what part of the duty cuts can be passed on to the end consumer," said an official at HCL Infosystems.

Domestic vendors will not only profit from the excise duty cuts on hardware from 16 per cent to 8 per cent but they will also enjoy the benefits of the 5 per cent peak-custom duty cut on imported components.