In a significant relief to global IT hardware manufacturers, the Centre has reportedly called off its plans to impose licensing requirements on the import of IT hardware products. Instead, India will look to regulate inbound shipments of products through an import management system.
According to government officials cited in an ET report, the Centre has decided that there won’t be any immediate restrictions on imports.
From November 1, companies would only need to register on the import management system to be set up by the government. Officials also told the publication that after six to eight months, the government will set up an import authorisation system to allot quotas to IT hardware importers.
The report added that import authorisation will be given on three parameters – import value of the previous year or an average of the past three years for IT products, domestic manufacturing of IT hardware devices and exports of electronic goods.
The development comes a day after representatives from the IT hardware industry met the Minister of State for Electronics and Information Technology Rajeev Chandrasekhar to discuss the import management rules. The industry will also soon meet the officials of the Directorate General of Foreign Trade (DGFT), which will manage the import management system, to finalise the modalities around the registration process.
According to an executive with one of the IT hardware companies, the focus of the government is on ease of doing business and streamlining processes.
For the current fiscal year, the government will only monitor the source and value of devices as part of the import management system. The companies will be allowed to import as much hardware as they require to meet demand. Quotas and other compliances will come into effect later.
Why Restrictions On Import Of IT Hardware?
On August 3, the Directorate General of Foreign Trade (DGFT) notified immediate restrictions on the import of laptops, tablets, and personal computers falling under the HSN 8741 category.
The move to impose restrictions on the import of IT hardware caused panic in the local industry, which comprises global electronics giants like Apple, Dell, HP, Lenovo, and ASUS. After pushback from the industry, the government extended the timeline to November 1, 2023.
Fearing supply chain disruptions, many IT hardware importers advanced procurement, which led to a 50% jump in IT hardware imports in August compared to July 2023, according to government data.
The move was part of the government’s efforts to boost local manufacturing of IT hardware. The Centre has also launched a $2 Bn production-linked incentive (PLI) scheme to promote domestic manufacturing of IT hardware. Speaking with the media on Friday (September 22), Chandrasekhar said the government is looking to meet up to 70% of India’s IT hardware requirements through local production in the next three years.
However, the notification seems to have had the intended effect, as media reports from the end of last month showed that as many as 38 companies applied for manufacturing IT hardware locally under the PLI scheme.
The traditional PC market in India, inclusive of desktops, notebooks, and workstations, grew 0.3% year-over-year (YoY) in 2022 to 14.9 Mn units despite a steep YoY decline of 28.5% in Q4 2022, according to a report by International Data Corporation.
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