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Sun Microsystems gets permission to set up subsidiary

The proposal says that Sun Microsystems has been permitted to establish a technical and marketing centre in the country.

The Indian subsidiary would provide support services to overseas Sun entities.

T O D A Y

• Ace Ventura • The Max divestment • Sun subsidiary cleared • Email-only lines

Initially, Sun would be investing $500,000 (Rs 20 million), a significant amount for this sector. Sources say the US computer software major has projected an export turnover of $10.15 million over five years.

The US major's proposal, pending before the government since the last quarter of 1997, was approved by the Foreign Investment Promotion Board at a recent meeting.

Significantly, while giving its consent, the Department of Electronics, the administrative ministry for the application, made an observation on the proposal.

According to the minutes of the FIPB meeting, the DoE "supported the proposal, clarifying that although the company will not initially undertake manufacture of computer software because of the proprietary nature of the technology and the standing of the company, this proposal needs to be supported and hence recommended for approval''.

Government sources believe that the DoE's treatment was somewhat special. However, it was generally felt at the FIPB meeting that the proposal and the consequent investment should go through. It was with these views that the FIPB finally gave its nod to the proposed 100 per cent subsidiary and recommended the case for approval of the industry minister, sources added.

Sources said that as per the proposal cleared, Sun Microsystems would be marketing and distributing its hardware and software products in the country.

This apart, the company would get into the system integration business.

In addition, the US major intends to get into the consulting business in related areas. The proposal states that the company would be involved in "educational training and consulting including the sale of licence of training materials, products, and associated documentation''.

Sun Microsystems has been keen to enter the Indian market. According to reports, the company, through its representatives, had expressed such a desire at a press meeting in the last quarter of the previous year.

The representatives of the US major at the time had also mentioned that it had applied to the FIPB for permission to set up a 100 per cent subsidiary.

Earlier:

• Sun Microsystems posts 69% growth in India
• Sun to set up 100 per cent subsidiary in India
• Sun sets up Competency Centre for Java in India

- Compiled from the Indian media

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