Retail Sales of Windows 7 Delayed in India

Microsoft launched its new Windows 7 operating system in India Thursday, but customers who want to buy off-the-shelf packages of the operating system at a retail store will have to wait longer.

Importers of packaged software to India are caught in a dispute with the country's customs department over the interpretation of new taxes on packaged software that were introduced in July. As a result, consignments of imported packaged software are not being cleared easily.

Windows 7 is however already available to consumers in India on computers that come factory-loaded with the new operating system, a spokeswoman for Microsoft said on Thursday.

Dell PCs with Windows 7, for example, are now available at retail stores across the country, a company spokeswoman said.

Enterprise customers can download and deploy the new operating system under a volume licensing agreement with Microsoft. Over 1,000 enterprise customers in the country are in the process of deploying Windows 7, the Microsoft spokeswoman said.

The delay at Indian customs will not have much effect Windows 7 sales in India, because off-the-shelf retail sales of packaged software account for less than 5 percent of Microsoft's operating systems sales in the country, according to an industry source who declined to be named. Most consumer sales of Windows are with hardware, he added.

New government rules that came into force in July introduced separate taxes on the import of the physical media for the software, and on the value of the software license, according to Raju Bhatnagar, vice president for government relations at the National Association of Software and Service Companies (Nasscom).

The sticker price on the box of packaged software does not however specifically state the value of the license, Bhatnagar said.

Microsoft said it hoped that its consignment of Windows 7 packages will be cleared soon.

Nasscom is asking the government to issue instructions to vendors and the customs department to resolve the issue. One option would be for vendors to print the value of the license on the packages, Bhatnagar said.