In a strategic move aimed at promoting local manufacturing, India has imposed restrictions on the import of laptops, servers, tablets, all-in-one personal computers, ultra small form factor computers, and servers. The government issued a notification stating that these products, falling under HSN 8741, will now be classified as ‘restricted’ imports. However, the import will still be permitted against a valid licensing permit, except for passengers carrying the mentioned devices in their baggage.
Boosting Local Manufacturing
This restriction on electronic imports comes as part of India’s ongoing efforts to boost domestic production and create a favorable environment for local businesses. Over the past few years, the Indian government has offered incentives to attract smartphone manufacturers, leading to a surge in local production. Encouraged by this success, the government is now looking to attract chipmakers and semiconductor producers as well.
Modi Government’s $2 Billion Scheme
In May, the Narendra Modi government unveiled a $2 billion scheme aimed at supporting businesses engaged in hardware production, including laptops, PCs, servers, and edge computing kits. This program is an upgrade to the previous initiative that had a budget of $892 million. The policy aims to provide secure digital access to the increasing number of digital citizens in the country, and the issuance of valid licenses to trusted industry partners is expected to ease business operations and grant unrestricted access to trusted brands for digital consumers.
Local Manufacturing Facilities and Ambitions
Companies like Dell and HP already have manufacturing facilities in India. The Indian government’s larger goal is to expand local production further and attract Apple and its manufacturing partners to establish a global manufacturing hub in the country. Despite the growth in local manufacturing, India still spends billions of dollars on importing laptops and other hardware.
Progress in Reducing Import Dependence
Government data shared in the parliament in December revealed that the import value of finished electronic goods in India grew by 32% to $43 billion in 2021–2022, up from over $32 billion in 2019–2020. However, thanks to the incentives and schemes offered to promote local production, the share of imported finished electronic goods (including components) in total electronic goods imports dropped to 64% in 2021–2022, down from 69% in 2019–2020.
Local Manufacturing Statistics
According to estimates by market research firm Counterpoint, during the first half of 2023, approximately 30% to 35% of laptops and 30% of tablets shipped to India were manufactured locally. This indicates a positive trend towards a stronger emphasis on local production and a reduction in reliance on imports.
India’s move to restrict certain electronic imports, along with the implementation of the licensing permit system, signals a determined effort to bolster the country’s manufacturing capabilities and pave the way for a more self-sufficient and competitive electronics industry.
