Global brands might get some time for local manufacturing

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Despite import curbs announced early this month, the government is quite sympathetic to the plea of manufacturers of laptop, tablets and other computer hardware to extend the need for license for imports in order to give them a fair chance to set up manufacturing capacities on Indian soil, The Economic Times has reported after speaking to senior government officials seized of the matter.

“The idea is to encourage the Apples, Dells and HPs of the world and others to start their production in India and not just be present through contract manufacturing or white labels,” said the official.

Stumped by the announcement of the government disallowing free import of laptops, tablets and other electronic devices, representatives of MNC brands such as Apple, Dell, HP and Acer met officials of the ministry of electronics and information technology on August 8. They urged the government to push back the license requirements by nine to 12 months to give them a realistic time to set up manufacturing bases in the country. Manufacturing Association of IT Hardware and India Cellular and Electronics Association representatives were also present at the meeting.

“The companies need reasonable time to set up manufacturing. We are also unsure about the process for licensing and the data needed from us. So, we will need this time,” a representative of one of the companies present in the meeting had said earlier.

The government placed restrictions on import of “personal computers, laptops, tablets, all-in-one PCs, ‘ultra-small form factor’ computers, and servers” falling under HSN code 8741.

A key objective of the government’s move was to promote manufacturing of these high-consumption items on Indian soil and to further boost exports from the country. The government is also open to offer sweeteners such as production-linked-incentive scheme to spice up its offer to the hardware companies.

During the meeting on August 8, government officials sought from the industry representatives how much time they would require to set up manufacturing facilities in the country.

The report suggested that if the ministry is convinced by the corporate plans it could consider some relaxation of the licensing norms needed for import of these items.

Industry executives think that facilities don’t exist in India for a quick shift to large-scale production of these items.

On the other hand, the government has indicated that the licensing norms would not be as tedious and bureaucratic as the images the very word license conjures up in India. The norms are likely to be quick and simple.

IT hardware worth $8.8 billion was imported in FY23 in India. Almost 58% of that amount ($5.1 bn) came from China. Singapore accounted for only $1.3 bn.

Incidentally, many scampered to buy laptops and other devices after news of the looming import restrictions spread, the driving motive being the apprehension that prices might rise after the licensing era begins.