IT hardware import restrictions might kick in next financial year

Thirty-six days after the licensing requirement for IT hardware imports was suddenly announced by the Director General of Foreign Trade, the government has told computer hardware firms that it is contemplating to settle for a registration process of imports this financial year sans any import quota or licensing requirements. The Economic Times has reported that MoS electronics and information technology Rajeev Chandrasekhar has conveyed the decision to the representatives of the industry.

The need for licensing and quota for import of laptop computers, tabs, personal computers and servers was announced on August 3. It was amended the next day and said that the licensing regime would kick in from November 3.

The logic forwarded for such curbs was that the government wanted the brands to manufacture in India in order to generate jobs and eventually turn the country into an export hub for such items. To sweeten the deal, the government also indicated that it would bring it under the cover of incentive schemes such as PLI.
The government’s sudden decision put big brands such as Apple, HP, Dell, Asus, Samsung. Lenovo, Acer in a tizzy as they pleaded with the government to extend the deadline since putting up manufacturing facilities in India would require far more time than the three months than the government allotted for them.
The administrative fiat also triggered apprehensions of product shortages. Prices also rose fast as many ran to the stores to make purchases.
The rush was such that imports in August rose higher than 12 lakh units compared to 8 lakh in July. Both customer companies and OEMs rushed to stock up fearing a crisis.
The big brands even nudged the US government to take up the issue with the policymakers in New Delhi.
Quoting officials aware of the development, the report stated that in 2023-24 the government will only keep an eye on the source and value of devices imported into the country and brands will be allowed to import as much as they need to satiate the market.
Import quotas or other attendant requirements will come into effect later or in the next financial year.
Incidentally, all the hardware brands had earlier communicated to the government that they were not averse to setting up manufactories in India but they needed more time to do it.
A majority of the firms are covered under the PLI 2.0 scheme.