On August 3, India’s Ministry of Commerce and Industry notified that the import of laptops, tablets, all-in-one personal computers, and ultra-small form factor computers and servers under code HSN 8741 will be restricted. The notification stated that the import of these products would only be allowed against a valid license for restricted imports. The decision for changing the licensing requirements was made by the Directorate General of Foreign Trade (DGFT) and will come into effect from November 1, 2023.
What is HSN 8741?
HSN stands for harmonized system nomenclature code and is a method used for the systematic classification of goods and determining their customs tariffs all over the world. The code 8741 is given to computers that have a goods and services tax rate of 18%.
Why has this licensing requirement been imposed?
According to a tweet by Rajeev Chandrasekhar, the Minister of State for Electronics and Information Technology, this restriction is an attempt to “reduce import dependence and increase domestic mfg [manufacturing] of this category of products.” He further says that the restriction of imports is meant to ensure that India’s tech ecosystems use, “trusted n [and] verified systems only.”
➡️India is becomng one of worlds fastest growing markets for Digital products includng Laptops, Servers etc.
➡️India and DigitalNagriks will consume millions of Digital products in coming Techade.
➡️Rapid digitilization / cloudification of our economy AND rapid growth of our… https://t.co/gdMcNnsEUT
— Rajeev Chandrasekhar 🇮🇳 (@Rajeev_GoI) August 4, 2023
“In 2022-23, India imported items worth Rs 43,000 crores from China,” said Kazim Rizvi, founder of the think tank The Dialogue. He added that this regulatory action could be an attempt to reduce India’s dependence on China. It is worth pointing out here that Chinese companies have been under the regulatory radar ever since the border tensions between India and China arose in 2020. This import licensing could be another instance of the same.
India has restricted the import of laptops, tablets, All-in-One PCs and ultra small form factors computers and servers (HSN Code 8471). The import of such items will only be allowed after obtaining a valid license of restricted imports.(1/n)
— Kazim Rizvi । क़ाज़िम रिज़वी (@kazimriz) August 3, 2023
Why it matters:
Once the import regulation on laptops and tablets increases, the prices of these products will also see a rise making it harder for people to get their hands on the latest electronics. It is also worth noting that while finished products will have to meet the new licensing requirements, the same isn’t true for the components of these products. This could potentially encourage companies to assemble their products in India, furthering the government’s Make In India initiative.
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Exemptions to licensing:
The Ministry of Commerce and Industry states that the purchase of a singular laptop, tablet, all-in-one Personal Computer, or ultra-small form factor computer, including those purchased from e-commerce portals, through post or courier will be exempt from import licensing requirements. Furthermore, an exemption is also provided for the import of up to 20 such items per consignment for the following purposes:
- Research and development
- Benchmarking and evaluation
- Repair and re-export
- Product development
Products exempt from import licensing requirements under these conditions would only be used for the stated purposes and will not be sold. After the intended purpose has been accomplished, the products would either be destroyed beyond use or re-exported. Furthermore, it says that laptops, tablets, all-in-one personal computers, ultra-small form factor computers, and servers which are an essential part of a Capital Good shall be exempted from the import licensing requirement.
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