Amrutha Avasarala, Pune
The Government of India, on Thursday, decided to implement measures on curbing imports of laptops, tablets, and personal computers with immediate effect. The imports would be carried out only with a valid license. “Import of laptops, tablets, all-in-one personal computers, and ultra-small form factor computers and servers falling under HSN 8741 shall be ‘restricted’ and their import would be allowed against a valid license for restricted imports,” a notification released by the Ministry of Commerce read.
However, these curbs are not pertaining to purchases on online portals via courier or post. But such purchases bear duties, which were free earlier. “The said Restriction shall not be applicable to Imports under Baggage Rules, as amended from time to time,” the Ministry of Commerce and Industry said.
Those who intend to import for Research and Development, testing, benchmarking, evaluation, repair, re-export, and product development purposes, need not have the necessity to have a license to make the purchases. Basically, these benefits are only for those devices which are not meant to be sold. Such devices must be destroyed or re-exported after the purpose of their imports is served.
Previously, excessive import duties were charged to discourage the inflow into the Indian markets.
The intent seems to be “import substitution of certain goods that are imported heavily,” said Madhavi Arora, an economist at Emkay Global.
This step was taken mainly to boost local manufacturing in India. This is an attempt to promote and support ‘Make in India’. In 2022, $38 billion worth of mobile phones were produced in India whereas only $4 billion worth of laptops were produced. In April-June this year, electronics imports were estimated at $19.7 billion which is 6.25% more than the previous year. The aim is to lower dependency on foreign markets and escalate the growth of Indian markets.
“The move’s spirit is to push manufacturing to India. It’s not a nudge, it’s a push,” Ali Akhtar Jafri, former director general of the Manufacturers’ Association of Information Technology, said.
The aspiration and objective is to establish India as the global manufacturing hub, mainly focusing on the electronics sector. The aim is to have a $300 billion production yearly by 2026.
This move taken by the government will pose hurdles to companies like Dell, Apple, Acer, Samsung, Panasonic, Lenovo, and HP. These companies are heavy players in the electronics market and they largely depend on imports to run their sales. The imports are mainly for China with an intention to meet consumer demand. Companies that do not have manufacturing units in India now ought to set up their units here to keep their demand and supply chain undisturbed and intact.
Promoting the scope for local markets is the main reason, incentives are being provided by the government. A $2 billion manufacturing incentives program’s deadline has been extended to draw investments in IT hardware manufacturing. These involve the manufacturing of laptops, tablets, PCs, and servers.