DC Edit | Will Indian tech giants step up?

After India boosted its mobile phone manufacturing through a carrot-and-stick policy, involving production-linked sops and import restrictions, the Narendra Modi-led government has announced restrictions on the import of laptops, tablets and some types of computers, citing security reasons.

India has imported personal computers, including laptops worth $5.33 billion in 2022-23, as against $7.37 billion in 2021-22, while the overall electronics imports accounted for $19.7 billion between April and June 2023, expanding at a rate of roughly six per cent each year.

According to a report of think-tank Global Trade Research Initiative (GTRI), India’s 65 per cent imports from China are limited to just three product groups — electronics, machinery and organic chemicals.

According to the Directorate General of Foreign Trade (DGFT), the import of all these items would be allowed against a valid licence. “Import of laptops, tablets, all-in-one personal computers, and ultra small form factor computers, servers and others is ‘restricted’ with immediate effect,” DGFT said in a notification.

Following the restrictions, companies would be required to obtain an import licence under the new laws — which could cause a delay in the simultaneous release of new PC and laptop models in Indian marketplaces. It is likely to give more time to companies to apply for these licences, extending stipulated timelines of import restrictions, IT ministry sources said. The government, however, will allow the import of one laptop, tablet, personal computer, or ultra-small form factor computer, including those purchased from e-commerce sites via post.

Though the import licensing requirements could rekindle the memories of the long-forgotten licence raj, the government stressed that its aim was to “ensure trusted hardware and systems, reduce import dependence and increase domestic manufacturing of electronic items”.

Most imports of electronic items from China are manufactured by hardware giants like HP, Dell, Acer, Samsung, LG, Apple and Lenovo. The import curbs could force the global hardware giants to step up its production in India, if it wants to compete with the local electronic manufacturers. In either case, India will be the winner.