Why has India restricted import of laptops, tablets, and PCs?

In a significant move aimed at bolstering domestic manufacturing and reducing reliance on imports, the Indian government has imposed 'immediate' restrictions on the import of laptops, tablets, and personal computers, as reported by PTI.

According to a notice issued by the Directorate General of Foreign Trade on August 4, the import of electronic goods falling under HSN 8471 (a category) will now be classified as "Restricted," allowing imports only against valid licenses for restricted imports.

Centre imposes restrictions on import of laptops, tablets and personal computers today with immediate effect.

In a notification, government states that the import of these items would be allowed against a valid licence for restricted imports.

— All India Radio News (@airnewsalerts) August 3, 2023

What does it mean?

• According to the new rules, companies would now require an import license to do so. This could delay the simultaneous launches of new PCs and laptop models in the Indian markets.
• “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. 
• Exemption from the import licencing is, however, provided for the import of 1 laptop, tablet, all-in-one personal computer or ultra-small form factor computer, including those purchased from e-commerce portals through post or courier.

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• Additionally, the exemption from import licensing will apply to up to 20 such items per consignment, provided they are intended for research and development (R&D) testing, benchmarking, evaluation, repair and re-export, and product development purposes.
• It is crucial to note that these imported goods must be used solely for the stated purposes and not be sold within the country. Once their intended purpose is fulfilled, the products will either be rendered beyond use or re-exported.

Why the restriction?

• The government sees a clear opportunity for Indian manufacturers to fill in as electronics imports, including laptops, tablets, and personal computers, accounted for $19.7 billion during the April-June 2023 period, growing at around 6% per year.
• The recent step signals a resolute push by the Indian government to promote the domestic manufacturing sector.
• In order to reduce the heavy reliance on imports, especially from China. Laptops, tablets, and personal computers account for about 1.5% of the country's total annual imports, with nearly half of these products coming from China. By imposing high tariffs on items like mobile phones in the past, India successfully catalyzed domestic output, resulting in $38 billion worth of mobile phone production last year.
• This step is aligned with the government actively offering production-linked incentives (PLIs) to more than two dozen industries, including electronics. The government has extended the application deadline for its $2 billion manufacturing incentive scheme, which seeks to attract significant investments in IT hardware manufacturing, covering laptops, tablets, personal computers, and servers. With this ambitious initiative, India aims to achieve an annual electronics production worth $300 billion by 2026.

Impact on key players

• Global technology giants like Dell, Acer, Samsung, LG Electronics, Apple Inc, Lenovo, and HP Inc have a substantial presence in the Indian laptop market, with a significant proportion of their products being imported from countries like China.
• This restriction may encourage these companies to explore opportunities for local production in order to continue catering to the Indian market effectively.