The action may reduce inbound shipments of these commodities from China and Korea. Importers of these commodities would now be required by the government to get authorization or a license for their inbound shipments. As per government officials, the limitation will allow India to acquire such gear only from “trusted partners.”
What does the ban on import of Laptops mean?
Companies would now be required to obtain an import license under the new laws. This could cause a delay in the simultaneous release of new PC and laptop models in Indian marketplaces.”The said Restriction shall not be applicable to Imports under Baggage Rules, as amended from time to time,” stated the Ministry of Commerce and Industry.
The import of one laptop, tablet, all-in-one personal computer, or ultra-small form factor computer, including those purchased from e-commerce sites via post or courier, is exempt from import licensing.
Furthermore, the exemption from import licensing will apply to up to 20 such items per consignment if they are intended for R&D testing, benchmarking, assessment, repair and re-export, or product development.
It is critical to remember that these imported items may only be utilized for the purposes specified and may not be sold within the country. When their intended function has been met, the products will either be rendered obsolete or re-exported.
Why India banned the import of Laptops?
The government sees a clear opportunity for Indian manufacturers to fill the gap, since electronics imports, including laptops, tablets, and personal computers, accounted for $19.7 billion between April and June 2023, expanding at a rate of roughly 6% each year.
Government wants to encourage the domestic manufacturing sector.
In order to lessen dependency on imports, particularly from China. Laptops, tablets, and personal computers make for approximately 1.5% of total yearly imports, with roughly half of these products originating in China. In the past, India successfully stimulated local output by imposing high tariffs on things such as mobile phones, resulting in $38 billion in mobile phone production last year.
The approach is in line with the government’s production-linked incentives (PLIs) that has been extended to more than a dozen industries, including electronics. The government has extended the deadline for applications for its $2 billion manufacturing incentive plan, which aims to encourage large investments in IT hardware manufacture, including laptops, tablets, personal computers, and servers. With this ambitious program, India hopes to produce $300 billion in electronics annually by 2026.
How will it affect the companies?
Global tech hardware giants like HP, Dell, Acer, Samsung, LG, Apple and Lenovo have a substantial presence in the Indian laptop industry, with a sizable proportion of their products imported directly from China.
This restriction may drive these corporations to look into opportunities for local production in order to continue efficiently serving the Indian market.