India has restricted imports of laptops, tablets and personal computers with immediate effect, according to a government notice on Thursday, in a bid to push local manufacturing.
"Their import would be allowed against a valid license for restricted imports," the notice said.
In April-June, electronics imports, which include laptops, tablets and personal computers, were $19.7 billion, up 6.25% year-on-year. Electronics imports range between 7% to 10% of the country's total merchandise imports.
"The move's spirit is to push manufacturing to India. It's not a nudge, it's a push," said Ali Akhtar Jafri, former director general at electronics industry body MAI T.
India has been trying to push local manufacturing by giving production-linked incentives in over two dozen sectors, including electronics.
It has extended the deadline for companies to apply for its $2 billion manufacturing incentive scheme to attract big-ticket investments in IT hardware manufacturing, which covers products like laptops, tablets, personal computers and servers.
The incentive scheme is key to India's ambitions to become a powerhouse in the global electronics supply chain, with the country targeting annual production worth $300 billion by 2026.
Dell, Acer, Samsung, LG Electronics, Apple Inc, Lenovo and HP Inc are some of the key companies selling laptops in the Indian market and a substantial portion are imported from countries such as China.
Shares of Indian electronic maker Dixon Technologies rose over 5% on the news.
Laptops, tablets and personal computers compose about 1.5% of the country's total annual imports and nearly half of those are bought from China, according to government data.
India has imposed high tariffs in the past on products like mobile phones to catalyze domestic output.
Last year, it produced $38 billion worth of mobile phones in the country, while local production of laptops and tablets were just $4 billion in comparison, according to estimates from industry body India Cellular and Electronics Association.
The restrictions will not be applicable on imports under Baggage Rules, the ministry added. Baggage Rules refers to the checks every passenger entering or leaving Indian border has to pass under Customs.
The ministry stated in the notification that there would be an exemption from the Import Licensing requirements for the import of one laptop, tablet, all-in-one personal computer, or ultra small form factor computer, including those purchased from e-commerce portals through post or courier. Imports will be subject to payment of duty as applicable.
There is also an exemption from import license for 20 such items per consignment for the purpose of R&D, testing, benchmarking, evaluation, repair and re-export, and product development purposes. These imports will be allowed only on the basis that they would be used for the said purposes and not sold. Once the intended purpose is achieved, the ministry added, the products will be destroyed beyond use or re-exported.
“Regarding re-import of goods repaired abroad, license for Restricted Imports shall not be required for repair and return of said items,” the notification highlighted.
Laptops, tablets, all-in-one personal computers, and ultra small form factor computers and servers, which are an essential part of capital good shall be exempted from the import licensing requirements, the order stated.
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