New Delhi: Indian computer sales fell 11 per cent to 1.61 million units in the year to March from the previous year due to slow economic growth, industry figures showed on July 5.

In the previous financial year, sales had grown 34 per cent, the Manufacturers Association of Information Technology (MAIT) said.

"The severe recessionary trend in the Indian economy has adversely impacted the domestic hardware market," MAIT said.

"The market witnessed significant slowdown in IT consumption in general manufacturing, banking and finance, media and service sectors."

MAIT said a sales recovery was expected in the current year with 12 per cent growth seen likely.

"The slowdown in the IT market is of immense concern to the industry, but increased sales in smaller towns and cities brings a ray of hope," Vinnie Mehta, executive director of MAIT, told a news conference.

Sales of computers in smaller towns and cities more than doubled.

"There is an increased need to support this market and grow it further. However, it can only happen if applications, tools and content are made available in the local language to create a pull effect," Mehta said.

He said the industry would help research and development in this area.

Of total computer sales, 56 per cent were purchased in the biggest four Indian cities of Delhi, Bombay, Madras and Calcutta, and sales in these cities was down 14 per cent from the previous year.

The overall decline in computer purchases affected both households and businesses, although sales increased during the second half of the year, MAIT said.

MAIT president S Devarajan said the government should help encourage more people to buy computers for education and business by offering loans at low interest rates.

Overall sales of computer printers increased by a marginal one per cent during the year to March, but computer notebooks and servers declined.

Use of the Internet among business and households was slightly higher, but most continued to rely on dial up telephone lines rather than high-speed broadband connections.

Cheaper brands and unbranded computers accounted for 46 per cent of the total sales during the year and the total sales in this segment fell 22 per cent from the previous year.

"The poor performance reflects that people in the price sensitive market segments deferred their IT purchase plans in the last financial year," MAIT said.

However, the market share of the relatively costlier multinational computer brands increased by seven per cent.