India has taken a significant step towards promoting domestic manufacturing by implementing restrictions on the import of laptops, tablets, and personal computers. According to a government notice issued on Thursday, the import of these electronic devices will now require a valid license for restricted imports.
The move aims to bolster local production and reduce reliance on foreign-made electronics. The government intends to encourage companies to manufacture these devices within India’s borders, supporting the country’s vision of becoming a major player in the global electronics supply chain.
Electronic imports, including laptops, tablets, and personal computers, amounted to $19.7 billion during the April-June quarter, marking a 6.25 percent year-on-year increase. These imports account for around 7 percent to 10 percent of India’s total merchandise imports, Reuters news report said.
Former director general at the electronics industry body MAIT, Ali Akhtar Jafri, described the move as more than just a nudge; it’s a definite push to propel manufacturing within India. The government has been offering production-linked incentives in various sectors, including electronics, to attract substantial investments.
To further attract investments in IT hardware manufacturing, India has extended the deadline for companies to apply for a $2 billion manufacturing incentive scheme. This scheme covers products like laptops, tablets, personal computers, and servers and is crucial in achieving India’s goal of achieving $300 billion worth of annual electronics production by 2026.
Madhavi Arora, economist at Emkay Global, believes that the primary intent behind the restrictions is “import substitution” for goods heavily imported from other countries. Government data indicates that laptops, tablets, and personal computers constitute around 1.5 percent of India’s total annual imports, with nearly half of these devices being sourced from China.
This move follows previous efforts by India to boost local production by imposing high tariffs on products such as mobile phones, which resulted in a significant increase in domestic output. In contrast, the country’s local production of laptops and tablets remained relatively low at $4 billion compared to the $38 billion worth of mobile phones produced last year, according to estimates from the India Cellular and Electronics Association.
The latest data from the International Data Corporation (IDC) reveals that India’s traditional PC market, including desktops, notebooks, and workstations, experienced a 30.1 percent year-on-year decline in shipments in the first quarter of 2023 (Jan-Mar), with only 2.99 million units shipped. HP, Lenovo, Dell, Acer, and Asus are the leading vendors in the PC market, with HP holding the largest market share at 33.8 percent.
With the new import restrictions in place, the Indian government hopes to create a thriving domestic manufacturing ecosystem and boost the country’s position in the global electronics industry.
