Computer import curbs: Industry body warns of disruption; seeks more time

Amid the government's notification regarding imposing import curbs on laptops, tablets, and servers, the personal computer (PC) companies have requested the Centre to give a three-month grace period for a smooth implementation of the new licensing requirement.

Hardware industry body Manufacturers’ Association for Information Technology (MAIT) has said the latest notification of the government regarding import curbs comes as a "surprise" and it's taken without any consultations with the industry stakeholders.

The association seeks more time from the government to discuss issues in detail so immediate disruption of businesses could be avoided. It has also said the decision could impact consumers as they won't be able to buy imported products and that it'll create a huge shortage, pushing the prices of these products up.

The India Cellular & Electronics Association (ICEA), the apex industry body of the mobile & electronics industry, is also expected to meet government representatives to discuss the issue soon.

In a notification on August 3, 2023, the directorate general of foreign trade under the Ministry of Commerce & Industry issued a notification, making amendments to import policy, curbing the import of laptops, tablets, all-in-one personal computers, and ultra-small form factor computers and servers, falling under HSN 8471. Their import could only be allowed against a "valid license for restricted imports", the notification adds.

The move is aimed at promoting domestic manufacturing, and due to reasons related to national security as such devices can compromise data.

The restriction will not be applicable to imports under baggage rules, says the DGFT. "Exemption from import licensing requirements is provided for the import of 1 laptop, tablet, all-in-one personal computer, including those purchased via e-commerce portals, through post or courier."

Such imports will, however, be subject to payment of duty as applicable.

"Exemption from import license is provided for up to 20 such items per consignment for the purpose of R&D, testing, benchmarking and evaluation, repair and re-export, product development purposes," says DGFT, adding that given imports will be allowed subject to the condition that the imported goods will be used for the stated purposes only and will not be sold. After the intended purpose, the products would either be destroyed beyond use or re-exported.

The notice further says that regarding the re-import of goods repaired abroad, a license for restricted imports will not be required for the repair and return of said items. Also, laptops, tablets, all-in-one personal computers, and ultra-small form factor computers and servers, which are an essential part of a capital good, will be exempted from the import licensing requirements.

Many see it as another move by the Centre to counter China. Notably, the share of electronic goods imported from China declined from 48.1% in FY22 to 41.9% in FY23, say commerce ministry officials. India imported $30.3 billion worth of electronic goods from China in FY22. The number came down to $25.3 billion in FY23.