Importing Laptops Into India Will Now Require a Permit | Mint
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Business News/ Economy / Importing Laptops Into India Will Now Require a Permit
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Importing Laptops Into India Will Now Require a Permit

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It is India’s latest move aimed at curbing Chinese imports while boosting local manufacture

India’s move is seen as aimed at persuading more global electronics makers to sign on to its ‘Make in India’ program. Premium
India’s move is seen as aimed at persuading more global electronics makers to sign on to its ‘Make in India’ program.

India is making it harder to import laptops, tablets and other consumer-electronics devices in a move intended to boost local manufacturing and curb imports from China, government and industry officials said.

India’s Ministry of Commerce and Industry said Thursday that imports of laptops and other personal-computing devices would now require permits, making the import process far more onerous.

“There were concerns related to security of hardware in some of these imported products. So, in the digital security interest of India, we have taken this step," said an Indian government official with direct knowledge of the matter. “The fallout of this could also be that the companies start looking at local manufacturing."

The move is widely seen as aimed at getting more global electronics makers to sign on to the country’s Make in India program, which offers incentives for manufacturing electronics and other high-tech goods locally, with eligible companies standing to recoup millions of dollars of their investments. The country initially targeted the program at smartphones and has since expanded it to other areas, including drones and semiconductors as well as tech hardware.

Imports of computing devices covered under the new restrictions, which include computers and servers, totaled nearly $10 billion from January to December 2022, according to official data, or about 1.4% of India’s overall imports last year.

The new rules also take aim at China, the main source of India’s laptop imports.

Tensions with China soared in 2020 following the intense clash between the security forces of the two countries along the disputed Himalayan borders in eastern Ladakh. The incident resulted in the deaths of 20 Indian and four Chinese soldiers, prompting the militaries of the two countries to deploy more than 50,000 soldiers equipped with the latest weaponry and artillery along the border.

In retaliation, India moved to ban TikTok, the popular Chinese video-streaming platform, and the message app WeChat. It put in place a mechanism to strictly scrutinize any investment proposal from China, and barred Chinese companies such as Huawei Technologies and ZTE from being part of India’s massive 5G rollout program. Tax and enforcement authorities have opened investigations into leading Chinese mobile makers like Vivo, Xiaomi, Oppo and OnePlus for alleged tax evasion, which the companies deny.

India doesn’t currently have prominent local personal-computer makers, while global companies such as HP and Dell Technologies currently manufacture locally in limited quantities. Apple, which makes iPhones in increasing numbers in India through its contract manufacturers, doesn’t yet make MacBooks or iPads in the country.

Tarun Pathak, director at Counterpoint Research, said India has made remarkable progress in achieving almost 100% local manufacturing of smartphones and televisions, but in the IT hardware segment about two-thirds of sales rely on imported units.

Dell applied under an earlier version of the program to qualify for incentives for local laptop manufacture. In May, the government expanded funding to around $2 billion for manufacturing IT hardware, which covers laptops, tablets, all-in-one personal computers and servers, in a bid to sign on more global firms. This week it extended the deadline for manufacturers to apply under the program to Aug. 30.

India has also accompanied the incentives with tariffs or other import restrictions, which industry executives and analysts say could affect both manufacturers and consumers, given that local manufacturing for many types of electronics and components has yet to scale up.

“It’s a knee-jerk reaction by the government. Industry is in a fix. They should have first done some consultation with us and not restricted the imports with immediate effect," said a senior executive at a leading consumer electronics company that also sells tablets and laptops. “This will impact business continuity."

The restrictions could lead to supply disruptions in the short term, particularly as the festival shopping season approaches, said Pathak, of Counterpoint, which puts the size of India’s annual personal-computer market at around $8 billion.

HP leads the market for personal-computer sales in India, followed by Lenovo of China, according to market-research firm IDC.

Officials and industry executives say the incentive program has already boosted Indian tech manufacturing. Trade data for April to June showed that although overall exports were down, electronics exports—especially of smartphone—have grown substantially.

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