India restricts imports of laptops, tablets and PCs to boost local manufacturing

In a major move aimed at boosting local manufacturing, India on Thursday (August 3) imposed with immediate effect curbs on importing laptops, tablets and personal computers.

“Import of laptops, tablets, all-in-one personal computers, and ultra small form factor computers and servers falling under HSN 8741 shall be ‘restricted’ and their import would be allowed against a valid licence for restricted imports,” a notification released by the ministry of commerce read.

However, imports under baggage rules are still allowed. It means that one laptop, tablet, all-in-one personal computer, or ultra-small form factor computer, including those bought from online portals through post or courier, will not fall under the purview of the Import Licensing Rules.

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However, the duty on such items will have to be paid. The import was free under the previous regime.

More details about the new import regime

The notification also mentions that 20 such items (laptops, tablets and PCs) per consignment to focus on research and development, testing, benchmarking, evaluation, repair and re-export, and product development purposes will be exempted from import licence.

Make no mistake, these exemptions only apply to those items not meant to be sold. The items must be destroyed or re-exported once the intended purpose of the import is fulfilled.

It also added that the license for restricted imports was not required for re-importing goods sent abroad for repair.

Move aimed at boosting local manufacturing

Experts believe the move will boost the government’s ‘Make in India’ programme, as the country seeks to capitalise upon its vast consumer market to force manufacturers to start production in India.

"The move's spirit is to push manufacturing to India. It's not a nudge, it's a push," Ali Akhtar Jafri, former director general at electronics industry body MAIT, was quoted as saying by Reuters.

The intent seems to be "import substitution of certain goods that are imported heavily," said Madhavi Arora, an economist at Emkay Global.

Previously, India relied on excessive import duties to discourage imports and encourage local manufacturing.

In 2022, India produced mobile phones worth a whopping $38 billion, while the production of laptops and blankets was a mere $4 billion.

Production-linked incentives

India is actively promoting domestic production by offering production-linked incentives across various sectors, including electronics.

The application deadline for India's $2 billion manufacturing incentive programme has been also extended, to attract significant investments in IT hardware manufacturing. This programme encompasses items such as laptops, tablets, personal computers, and servers.

Watch:India: A truly 'bright spot' in world economy

This incentive initiative plays a pivotal role in India's aspiration to establish itself as a dominant player in the worldwide electronics supply network, aiming to achieve a yearly production value of $300 billion by 2026.

(With inputs from agencies)

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