By Abhik Sengupta: The Indian government has restricted imports of products under HSN code 8741, which mainly covers laptops, tablets, all-in-one PCs, and ultra-small computers. The decision was announced by the Directorate General of Foreign Trade (DGFT) and approved by the Ministry of Commerce and Industry earlier this week. The central government’s move is largely taken to boost the manufacturing of PCs in India as major OEMs, including Apple, Dell, HP, and Lenovo, import devices manufactured in China. Until that happens, the prices of PCs and tablets in the country may likely increase as companies are required to obtain an import licence.
Here are the key takeaways from the government’s restriction on PC imports in five points.
–In a release on August 3, the government notice reads, “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.” The measures are in place with an immediate effect.
–There are exemptions for individuals purchasing from online stores, though they will need to pay taxes. Additionally, there are exemptions on import licensing on PCs for research and development, testing, benchmarking, evaluation, repair, and re-export.
–As mentioned, the move will directly boost manufacturing in India. The centre has also been pushing for production-linked incentives (PLI) for IT hardware. The scheme was revised earlier in May with an outlay of Rs 17,000 crore — double the budget that was first cleared in 2021. The curb on PC imports echoes the government’s move for colour TVs in 2020. Two years later, Viera group, one of India’s leading electronics manufacturers, told Reuters that the government’s move plus incentives boosted local TV manufacturing.
–The move may also benefit companies like Reliance, which recently launched JioBook in India. Although these companies are likely to import their laptops from China, the shift is still expected to aid them since local companies may find it easier to obtain the import exemption licence. Meanwhile, Indian electronic goods manufacturer Dixon Technologies shares also rose 6 per cent in Thursday’s trade after the government’s notice.
–At the same time, PC OEMs may suffer a big blow in the next few quarters. According to International Data Corporation’s (IDC) data, India’s traditional PC market (inclusive of desktops, notebooks, and workstations) declined by 30.1 per cent YoY in 1Q23 (Jan-March). Counterpoint’s Research Director, Tarun Pathak, told India Today, “With the total Laptop/PC market size close to $8 billion annually and approximately 65 per cent of units being imported, the government’s move is aimed at promoting domestic production and reducing dependence on imports. The industry comprises around 12 million units, and this restriction may lead to some short-term supply disruptions, especially for brands like Apple, HP, and Lenovo.” He adds that the government’s strategy aligns with its PLI Scheme 2.0 for IT Hardware to boost the Make in India vision.