Why India imposed Restrictions on Import of Laptops, Tablets, and PCs?

 

The central government on 3rd August 2023 imposed restrictions on import of laptops, tablets, personal computers and ultra-small computers and servers. Any company planning to bring laptops and computers for sale in India will now have to seek permission or license from the government for their inbound shipments. The notification on this was issued by the Directorate General of Foreign Trade (DGFT). The import of electronic goods falling under HSN 8471 (category) will now be classified as “Restricted,” allowing imports only against valid licenses.

Although, A day after mandating a license for import of laptops, tablets & PCs, the government decided to give a “Transition Period” for companies to migrate to the new licensing regime.

Why have these restrictions on import been imposed?

The move has been announced with an aim to promote domestic manufacturing of laptops, tablets, personal computers under the recently renewed production-linked incentive (PLI) scheme for IT hardware. The last date to apply for the so-called production-linked incentives in this product category will be announced soon. It also reduces inbound shipments of these goods from countries like China and South Korea.

Restrictions on Import of Laptops

 

However, a government official said that there are various reasons for imposing these restrictions on imports but the primary is “to ensure that the security of our citizens is fully safe”.

“Some of the hardware could have security related issues and could compromise sensitive and personal data, they have taken into account few of those things” the officials told the news agencies.

On 4th August 2023, Minister of state (IT & Electronics) Rajeev Chandrasekhar said “notification regarding the relaxation of norms would be issued. A transition period for this to be put into effect which will be notified soon”.

 

 

What will be the Impact on key players?

Global Tech Giants like Dell, Acer, Samsung, LG , Apple, Lenovo, and HP  have a substantial presence in the Indian laptop market, with a significant proportion of their products being imported from countries like China and South Korea.

This restrictions on import may encourage these tech giants to explore opportunities for local production in order to continue catering to the Indian market effectively.

Restrictions on Import of Laptops

Whereas, On 3rd August government has decided that top companies like Apple, Samsung etc were forced to stop shipments to India, as they need license immediately to keep supply going. So next day on 4th August, government has decided to give time to companies to apply for licenses.

 

 

Will restrictions on imports have an Impact on Domestic Prices of Laptops?

If this move would have an impact on domestic prices, the official said “no”. However, industry experts have flagged suspicion that it could lead to price rise of Laptops, tablets, and PCs. 

Even as the implication of the restrictions on import of laptops will be clear in the coming days, the price of current laptops that are out in the market will increase. This is primarily because, in the short run, the restrictions on import is bound to create a scarcity in the market as there will be higher demand and less supply of Laptops, tablets, and PCs.

Whereas companies like Apple & Lenovo have not changed the price of the current laptops that are already in the Indian market. The restrictions on import is likely to impact the sales and discounts that retailers & companies offer in the market. If the demand increases, the retailers will have no incentive to offer discounts on the laptops, tablets, and PCs.

 

Restrictions on Import not Applicable To Imports Under Baggage Rules

These restraints are not applicable to imports under baggage rules, under which one old and one new laptop is allowed in a baggage. Over and above this, exemptions from import licensing requirements are also provided for import of one laptop, tablet, personal computer which are purchased from e-commerce websites, through post or courier.

Restrictions on Import of Laptops

The Central government has taken several steps to boost domestic manufacturing of electronic items such as rolling out of the production-linked incentive (PLI) scheme and even increasing custom duty on the number of electronic components.

 

 

 

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