Today, the government of India announced immediate restrictions on the imports of tech products, including PCs, laptops, servers, smart devices, and PC components. According to various reports on this news, the aim is to curtail imports of popular tech products, which largely come from China, to promote domestic manufacturing. IT security concerns might have also influenced the implementation of extra trade restrictions.
India’s government, led by Prime Minister Narendra Modi, has pursued a Make in India plan since 2014. What we see today with the new tech import restrictions likely falls under this signature policy.
Both businesses and consumers are worried about the impacts of these new restrictions. Some expect the new trading rules to delay product rollouts and price increases on desirable foreign-produced tech.
Specifically, the newly enacted policy states, “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 license for restricted imports.” However, an unnamed source speaking to Reuters indicated that shipments already in progress will be allowed through customs without licenses until August 31.
There are some further details about the scope of the restrictions for consumers and businesses to take in. For example, individual consumers who are bringing in a single new device either through customs after international travel, or bought via a foreign-based e-commerce portal, are exempt from import licensing. However, they will have to make import duty payments.
Businesses can also swerve import restrictions on devices categorized as ‘capital goods.’ The government clarifies that these products must be essential business equipment for research and development, testing, benchmarking, evaluation, repair, or re-export. Only 20 such items per consignment will be exempt from import licensing.
India’s Tech Consumption
India imported nearly $20 billion worth of electronics, including PCs, between April and June this year. Counterpoint research estimates that India’s PC and laptop market is worth $8 billion per annum. Only a third of these PCs are thought to be manufactured inside India. In 2020, the Indian government imposed similar import restrictions on TV shipments.
Unsurprisingly, India-based contract manufacturers like Dixon Technologies have seen their shares surge today. The HSN 8741 restrictions have yet to be commented upon by foreign tech companies like Apple, Acer, Dell, HP, or Samsung, which are expected to be perturbed by the new policy.
