Electronics, Laptop | (Photo: Shutterstock)
3 min read Last Updated: September 25, 2024 | 08:13 PM IST
Think tank GTRI said on Wednesday that the government’s policy change on restricting imports of laptops and similar products has increased uncertainty and costs for businesses.
He added that firm and coherent policies are essential to encourage global technology companies to relocate their manufacturing to India and build a robust electronics supply chain.
He noted that the government needs to announce stable, long-term policies to boost domestic manufacturing and reduce dependency on China.
The ministry said import restrictions have been the primary tool to boost domestic production as India is bound by the World Trade Organisation’s (WTO) ITA-1 (Information Technology) Agreement and cannot raise import tariffs.
However, repeated extensions of import licences and delays in implementing a clear Import Management System (IMS) are undermining these efforts, the think tank said.
“Decisive and coherent policies are essential to encourage global tech companies to relocate their manufacturing to India and build a robust electronics supply chain,” said Ajay Srivastava, founder of GTRI.
India maintains import duty on computers, laptops and similar products at zero as per its commitment under the Information Technology Agreement (ITA-1), which requires participating countries to maintain zero customs duty on certain technology products.
“The agreement limits India’s ability to impose high tariffs on imports to stave off foreign competition. With import tariffs gone, India’s only option was to restrict imports to foster domestic manufacturing,” he added.
On August 3, 2023, the government imposed import restrictions on laptops, tablets, all-in-one computers, ultra-small form factor computers, and servers for the first time.
The government introduced import controls/licenses for import of these products in October last year after the industry raised concerns over the regulations.
The system aims to monitor the import of these items into the country without compromising market supply.
The government on Tuesday extended the existing approval regime for the import of certain IT hardware products, including laptops and tablets, by three months until December 31.
Importers will have to apply for new licenses from 1 January 2025.
Srivastava said India was right to reduce its dependency on any single country for its electronics supply chain, given that China controls 81% of the global personal computer and laptop market.
By limiting imports and gradually encouraging domestic manufacturing, India can quickly indigenize its electronics industry.
India’s imports of desktops, laptops and related products stood at $6.4 billion in 2018-19 and $6.5 billion in 2019-20. It increased to $8.2 billion in 2020-21 and $11.3 billion in 2021-22.
Imports are projected to decline slightly to $10.1 billion in 2022-23 and $9.4 billion in 2023-24.
China accounted for 54.7% of India’s imports last year, followed by Singapore (15.1%) and Hong Kong (8.3%).
GTRI said India’s reluctance to tighten rules on laptop imports is likely influenced by US concerns but needs to be addressed decisively.
“Such restrictions will force global technology giants such as Apple, Dell and HP, which currently have production in China, to consider relocating their production to India,” it added.
Srivastava said the United States was imposing tariffs on Chinese products like solar cells and electric vehicles to protect its interests and India needed to pursue its own strategic objectives without external pressure.
(Only the headline and photo of this report may have been modified by Business Standard staff. The rest of the content is auto-generated from a syndicated feed.)
First Published: 25th September 2024 | 8:13 PM IST
