Demonetisation And GST-Hit DataWind Shuts Hyderabad Facility

DataWind, maker of the world’s cheapest Android-based tablet Aakash, has closed down its two manufacturing facilities in India, after business shrank due to demonetization in 2016, Goods and Service Tax (GST)-related issues, besides the country’s duty structure, leading to a loss of some 1,000 jobs.

DataWind’s chief executive Suneet Singh Tuli told ET that the twin challenges had derailed the $35-tablet computer maker’s strategy to Make in India for the rest of the world, using the country’s human resource and cost-effective operations.

“Our target segment – those at the bottom of the pyramid – was severely impacted after demonetization and has continued to suffer since then,” Tuli said.

While people familiar with the matter say two facilities – at Hyderabad and Amritsar – have been shut down, Tuli said the Amritsar plant is still operating, but at far lower capacities. In 2017, the British-Canadian company had already halved its production at its Hyderabad unit, where production has completely halted now. These people said DataWind has been forced to hold up payments to vendors as well as to those employees who have parted ways, while its debt has mounted to 250 crore. Tuli, however, said the .`250-crore debt on its books was inter-company, and that was the investment that has been made from the Canadian parent company into India operations.

He added that the company was fighting a slew of court cases to recover its dues. “Subsequent to demonetization, India Post stole and misappropriated over 30,000 units for which court cases are pending and recovery is awaited,” Tuli said.

Emailed queries to IndiaPost remained unanswered till press-time. Once booming, India’s tablet market has been reduced to a third, impacted by demonetization of currency, and existing levies on components and higher GST slab, said Tuli.―India Finance News