Acer, the Taiwanese computer and peripherals giant, has sought government permission to extend the timeframe for test-marketing its products in India for some more time, since it is yet to begin manufacturing operations.
In 1999, the $7 billion company was allowed by the government to set up a wholly owned local subsidiary for manufacturing and marketing computers and laptops, after it parted ways with domestic IT major Wipro.
In February 2000, the company got clearance for setting up another wholly owned subsidiary for its peripherals, digital cameras and mobile phones business.
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While one of the subsidiaries was to manufacture and market computers under the Acer brand, the other was for manufacturing (or assembling) and marketing of monitors, CD-ROM drives, CD-RW drives, keyboards, scanners, LCD monitors, DVD/DVD-RW drives, printer, digital still camera, LCD projector and mobile phones, etc.
The investment was to be brought into the country by Acer Peripherals Inc, Taiwan.
Since Acer has not started manufacturing these products, it had taken government permission to test market them in the Indian market. The two-year validity of that approval is due for expiry.
But the company is yet to start commercial production of these products in the country. So it wants an extension for that validity period.
The foreign investment promotion board (FIPB) has in the recent past objected to foreign firms renewing their test-marketing plans after a two-year period, since there have been instances of companies using this route to conduct its business while avoiding investments in manufacturing operations. However, if companies give proof of their having invested in setting up its manufacturing operations during this period, the FIPB is lenient.