The company has made an initial investment of $2.5 million in the Indian subsidiary exclusive of operating expenses and is gunning for triple digit growth over the next couple of years, according to Saunders. The company is also actively considering the setting up of a manufacturing centre in India, according to Mr Saunders. Dell's manufacturing centre to service the Indian market is currently in Penang, Malaysia.

Infotech and the MNC are currently looking at striking alliances with more service partners. The company plans to initially work directly with customers in Bangalore, New Delhi, Mumbai, Calcutta, Chennai, Hyderabad and Pune where it has put in place sales support teams.

Explaining the rationale for entering the Indian market at this point, Saunders said that the Indian market is at the beginning of the transition from retail to corporate customers which comprises the core of Dell's market. Secondly, Saunders said that the market for PCs was set to grow at about 50 per cent which is difficult to ignore. Besides, Saunders expects the telecom revolution which is currently underway to drive IT growth and create a demand for PCs. "At last count, there were about 122 ISPs and now with broadband, we believe that the market will really pick up" he said.

Saunders also explained that the PCs currently used in institutions in India were about 3 or 4 years old and therefore a couple of generations behind the latest ones, "so we see a great opportunity for upgrades" he explains.

Finally, Saunders also pointed to states that were gearing up for IT-led growth like Andhra Pradesh and Karnataka, all of which he felt was indicative of the fact that the time is ripe for an entry into India.

While the company will be selling online and providing after sales support throughout the country, its sales support team will be located at the centres mentioned above. For all customers in India, the toll free Bangalore call centre number will serve as the single touch-point. In case of ordering the product online, the order is clocked online at the manufacturing centre in Malaysia from where the custom built machine will land at the customer's doorstep in India within seven days, according to company officials.

Internet sales account for about 50 per cent of Dell's sales the world over. The company does about $50 million the world over in terms of online sales everyday. It has a presence in about 170 countries and its manufacturing centres are located in the US, Ireland, Brazil, China and Malaysia.

The company's direct selling policy involves a system whereby Dell itself becomes the single-touch point for the customer right from the time of ordering the product to after sales service. The usage of the Internet for online sales and elimination of the reseller have both contributed towards realizing price efficiencies as well as reduce inventories to a 6 day period (as opposed to the industry average which could run into months), according to Saunders.

Dell announces India plans; to invest $2.5 million in Indian arm