Published: 10th Aug, 2023
Context
The Directorate General of Foreign Trade (DGFT) has delayed notification restricting imports of laptops, PCs, tablets and servers to India with immediate effect to November 1, 2023.
About
Key-highlights of the move:
- The Union government has restricted imports of personal computers, laptops, palmtops, automatic data processing machines, microcomputer/ processors and large/ mainframe computers with immediate effect.
- Under this move, seven categories of HSN Code 8471 (HSN is the Harmonised System of Nomenclature, a globally accepted method of naming goods) were restricted.
- Valid license: However their import would be allowed against a valid licence for restricted imports.
- Re-imports: Also, the licence for restricted imports shall not be required for the repair and return of re-import of goods repaired abroad, as per the Foreign Trade Policy.
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Directorate General of Foreign Trade (DGFT):
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Exemptions given:
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Current regulations permit companies to import laptops without any restrictions. |
- 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, has been exempted from licensing requirement. It will attract payment of duty as applicable.
- Imports up to 20 items per consignment for R&D, testing, benchmarking, and evaluation repair and re-export, and product development purposes, have also been exempted from import licence.
- The government has also exempted laptops, tablets, all-in-one personal computers, and ultra-small form factor computers from import licensing requirements if they are essential part of capital goods.
What is the need of the move?
- Increase in imports:India has seen an increase in imports of electronic goods and laptops/ computers over the last few years.
- During April-June 2023, the import of electronic goods increased with a share of 4-7 per cent in overall imports.
- Increasing presence of China:Majority of these imports were coming from
How would it benefit?
- Promoting domestic manufacturing: The move is aimed at promoting domestic manufacturing.
- Restricting China:Itprobably targets China since more than 75 per cent of India’s total imports of laptops and personal computers in 2022-23 were from the neighboring country.
- Inviting foreign companies: The fresh restrictions could impact companies such as Apple, Samsung and Acer, forcing them to step up manufacturing and assembly in India.
What India is doing to boost domestic production?
- Import Regulation: The Government of India, from time to time, takes appropriate measures to regulate import of goods including those related to national interest.
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India and China are both members of the WTO and any trade restriction imposed must be WTO compliant. |
- Atmanirbhar Bharat policy: To support and expand domestic capacities, Government has implemented policies to promote domestic manufacturing like the production linked incentive (PLI) schemes in line with Atmanirbhar Bharat policy.
- Recently, to encourage domestic production of lithium-ion cells for batteries used in electric vehicles (EVs), the government has removed customs duty on the import of capital goods and machinery used in the manufacturing of lithium-ion cells.
- The reduction in basic customs dutyreduces input costs and it is expected to deepen value addition, promote export competitiveness and boost domestic manufacturing.
- Recently, to encourage domestic production of lithium-ion cells for batteries used in electric vehicles (EVs), the government has removed customs duty on the import of capital goods and machinery used in the manufacturing of lithium-ion cells.
Concerns associated:
- Increased prices:The move could also potentially raise prices for consumers, depending on how the licensing norms are implemented.
- Increased pressure: It will further create pressure on required resources for production.
- Shortage:There will be a shortage of products in the market, exacerbating the supply chain issues caused by the Covid-19 pandemic and the semiconductor crisis.
Required measures
- Revised foreign policy:The government urgently needs to bring out a revised foreign policy to address both historical trade imbalance.
- Focus on credit cycle:The government should take appropriate measures to improve the credit cycle through investment and savings and promotion of foreign investment will bring the economy from slowdown in future.
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