In a major move aimed at boosting local manufacturing, India, on August 3, 2023, imposed curbs on laptops, tablets and personal computers with immediate effect.
According to a notification released by the Ministry of Commerce (India), “The import of laptops, tablets and the all-in-one personal computer and ultra-small form factor computers and servers falling under HSN 8741 shall be restricted, and their imports would be allowed against a valid licence for restricted imports.”
However, the imports on the baggage rules are still allowed. It means that one laptop, one tablet and all-in-one personal computer and the ultra-form factor computer, including those purchased from online portals by courier, will not fall under the preview of import licensing rules. However, the duty on such items will be paid.
More details about the Import Regime
The notification also mentions that twenty such items (laptops, tablets and PCs), as per consignment focus on research and development, testing, benchmarking, evaluation, repair and re-export, and product development purposes, will be exempt from the import licence.
The Move is expected to cut imports to China. Products under restrictions would require permission from the government as their import would only be allowed against the valid licence for restricted imports.
There are two exemptions which allow imports that do not involve sales of these items in the country. For instance, a consumer will be able to buy a single unit directly from outside the country, and the import of small consignments will not require an import licence for testing, evaluation and other similar activities.
Make No Mistake, these exemptions only apply to those items not meant to be sold. The items must be destroyed and re-exported once the intended purpose of the import is fulfilled. It also added that the licence for restricted imports was not required for re-importing goods sent abroad for repair.
Move aimed at boosting local manufacturing
It is believed that this move will boost the Make In India campaign and programme as the country seeks to capitalise upon its vast consumer market to force manufacturers to start production in India.
“The moves spirit is to push manufacturing to India. It is not a nudge, it is a push, Ali Akhtar Jafri, the formal director general at the electronics industry body MAIT,” was quoted as saying by Reuters.
The intent seems to be import substitutions of certain goods that are imported heavily, said Madhavi Arora, an economist at Emkay Global. Previously India relied on excessive import duties to discourage imports and encourage local manufacturing. In 2022, India produced mobile phones worth a whopping 38 billion USD, while laptop production and blankets were more than 4 billion USD.
In May 2023, PM Narendra Modi unveiled a two billion scheme aimed at promoting businesses locally building hardware like laptops, PCs along with some servers and related edge computer kits.
India has been providing incentives to firms in recent years in a bid to spur domestic production. The initiative has successfully drawn in a swath of smartphone manufacturers and is now increasingly piquing the interest of chipmakers and semiconductor producers.
Production Linked Incentives
India is actively promoting domestic production by offering production-linked incentives across various sectors and including electronics as well. The application deadline for India’s two billion manufacturing incentive programmes has also been extended to attract significant investments in IT hardware manufacturing. This programme encompasses items such as laptops, tablets, personal computers and servers.
This incentive plays a vital role in India’s aspirations to establish itself as a dominant player in the worldwide electronic supply network aiming to achieve a yearly production value of 300 billion by 2026.
