The government has restricted imports of laptops, tablets, and personal computers with immediate effect, according to a government notice on Thursday, in a bid to push local manufacturing.
"Their import would be allowed against a valid license for restricted imports," the notice said.
In April-June, electronics imports, which include laptops, tablets, and personal computers, were $19.7 billion (roughly Rs. 1,62,960 crore), up 6.25 percent year-on-year. Electronics imports range between 7 percent to 10 percent of the country's total merchandise imports.
"The move's spirit is to push manufacturing to India. It's not a nudge, it's a push," said Ali Akhtar Jafri, former director general at electronics industry body MAIT.
The government has been trying to push local manufacturing by giving production-linked incentives in over two dozen sectors, including electronics.
It has extended the deadline for companies to apply for its $2 billion (roughly Rs. 16,550 crore) manufacturing incentive scheme to attract big-ticket investments in IT hardware manufacturing, which covers products like laptops, tablets, personal computers, and servers.
The incentive scheme is key to India's ambitions to become a powerhouse in the global electronics supply chain, with the country targeting annual production worth $300 billion (roughly Rs. 24,81,400 crore) by 2026.
Dell, Acer, Samsung, LG Electronics, Apple, Lenovo, and HP are some of the key companies selling laptops in the Indian market and a substantial portion are imported from countries such as China.
Shares of Indian electronic maker Dixon Technologies rose over 5 percent on the news.
The intent seems to be "import substitution of certain goods that are imported heavily," said Madhavi Arora, an economist at Emkay Global.
Laptops, tablets, and personal computers compose about 1.5 percent of the country's total annual imports, and nearly half of those are bought from China, according to government data.
The government has imposed high tariffs in the past on products like mobile phones to catalyse domestic output.
Last year, it produced $38 billion (roughly Rs. 3,14,350 crore) worth of mobile phones in the country, while local production of laptops and tablets was just $4 billion (roughly Rs. 33,100 crore) in comparison, according to estimates from the industry body India Cellular and Electronics Association.
© Thomson Reuters 2023
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