Import ban: Indian Government restricted the import of computers, laptops and tablets

In an apparent effort to support PLI 2.0 for IT hardware, the Indian government has restricted the import of laptops, tablets, and computers. The Directorate General of Foreign Trade officially announced the news in a notice. The notice states that, as of right away, the import of Laptops, Tablets, All-in-One Personal Computers, and Ultra Small Form Factor Computers and Servers under HSN 8471 is “restricted.” However, one of these items—apart from servers—is given an exemption from import licensing per consignment.

For taxation purposes, products are classified using the Harmonized System of Nomenclature (HSN) code. The HSN code for data processing equipment is 8471. Machines designed to process data are identified by this code.

As the nation aims to become the world’s global manufacturing hub, the primary goal of the move appears to be to support domestic manufacturing. The government’s goal in limiting imports of these in-demand electronics is to lessen its reliance on foreign markets while also enhancing domestic manufacturing capacity. It is no secret that the government has been actively pursuing policies to position India as a desirable investment location for leading corporations worldwide.

Although there are concerns that short-term price increases will result from local assemblers returning to business, the government is expected that some businesses will switch to domestic manufacturing. The move is being applauded by domestic players, who fear that it will hurt international competitors and make them consider sourcing from India.

The Ministry of Electronics and IT reported that in 2022–2023, the nation’s electronics export was anticipated to reach Rs. 1.76 lakh crore.

According to Tarun Pathak, Research Director at Counterpoint, the government’s initiative is intended to promote domestic production and lessen dependence on imports given that the total PC/laptop market size is close to $8 billion annually and that 65 percent of units are imported.

According to a statement he released, “The industry consists of about 12 million units, and this restriction may result in some short-term supply disruptions, especially for brands like Apple, HP, and Lenovo. However, it is important to keep in mind that the government’s plan is in line with its recent announcement to extend the application period for the PLI Scheme 2.0 for IT Hardware and provide better incentives to support domestic manufacturing”.

A Gururaj, MD said, “We think the decision to limit imports of laptops, tablets, and computers is progressive and has the potential to increase domestic electronics production in the nation while also assisting in the realization of the Make-in-India vision. We currently produce laptops for well-known brands and hold the PLI for IT hardware. With this change, we anticipate further growth in our ability to produce these devices,”

The Manufacturers’ Association of Information Technology’s former director general, Ali Akhtar Jafri, believes that the ban on imports demonstrates the government’s strong commitment to encouraging domestic production.

Individuals who travel outside of India are permitted to bring one laptop, tablet, all-in-one computer, or ultra-small form factor computer back with them in their luggage without any import restrictions.

Also, import licenses permit an exemption for up to 20 items per shipment, particularly for product development, research, testing, and evaluation. The imports are allowed if they are only used for the intended purposes, are not sold, and are then either rendered unusable or are re-exported.