Central Idea

In August, the centre announced its intention to subject laptops, tablets, computers, and related products to a licensing regime starting from November 1.
However, it has now clarified that India will not impose licensing requirements on laptop and computer imports but will instead monitor their inbound shipments.

Lapop Import Restrictions: A Backgrounder

Import Restrictions: In August, India imposed import restrictions on various IT hardware products to promote domestic manufacturing and reduce imports, particularly from countries like China.
Industry Concerns: The IT hardware industry expressed concerns following the initial licensing announcement.
Security and Domestic Manufacturing: The government cited security concerns and the desire to stimulate domestic manufacturing as the reasons for the licensing conditions.

Import Values: India imports approximately $7-8 billion worth of IT hardware products annually.
Recent Trends: Import values for personal computers, including laptops, decreased from $7.37 billion in 2021-22 to $5.33 billion in 2022-23. Imports of certain data processing machines also saw a decline.
Production-Linked Incentive Scheme: In May, the government approved the Production Linked Incentive Scheme 2.0 for IT Hardware with a budgetary outlay of ₹17,000 crore. A similar scheme for IT hardware was approved in February 2021.

Critical Dependency: According to a report by the Global Trade Research Initiative (GTRI), India has significant dependency on China for various products, including laptops and mobile phones.
Government Initiatives: To reduce this dependency, the government has introduced measures such as the production-linked incentive scheme and increased customs duties on electronic components.

India’s decision to shift from a licensing regime to monitoring for laptop and computer imports aims to balance its goals of reducing import dependency and promoting domestic manufacturing.
However, there is a need to ensure smoother transition for businesses and trade.