According to an Economic Times report, India might call off plans to impose import licensing requirements on laptops, tablets, servers, and other IT hardware. According to the report, instead of licensing the import of IT products, the government now intends to regulate inbound shipments of such products through an import management system.
In August, the government notified its plans to allow only licensed laptops, tablets, all-in-one personal computers, and ultra-small form factor computers and servers. At the time, Rajeev Chandrasekhar, the Minister of State for Electronics and Information Technology, had said that the import licensing was an attempt to “reduce import dependence and increase domestic mfg [manufacturing] of this category of products” and to ensure that India’s tech ecosystem uses trusted and verified sources only.
What has changed?
The original notification essentially said that only licensed products would be allowed into India for bulk selling starting November 1, 2023. (Note: the purchase of a single product and the purchase of products for researching, testing, etc., were exempt from licensing.) Now, companies would only need to register on a yet-to-be-implemented import management system.
Government officials told ET that after 6-8 months of implementation, an import authorization mechanism will be put in place, which will be used to grant quotas to firms importing IT products. This authorization will be given based on three criteria—
- Import value of the previous year or an average of the past three years for IT products,
- Domestic manufacturing of IT hardware devices, and
- Exports of electronic goods.
The government says that it will not impose any control on the quantity of IT products being imported till October 2024. It is also considering a sunset clause for the system by 2030 – meaning that by 2030, the law might cease to exist.
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In May this year, the government increased the incentive outlay for its production-linked incentive (PLI) scheme for IT hardware from Rs. 7,325 crore to Rs. 17,000 crore. This scheme ensures that companies who choose to assemble laptops, tablets, all-in-one personal computers, and ultra-small form factor (USFF) computers in India receive financial support from the government.
Weeks after the import licensing requirement of IT products were notified, IT Minister Ashwini Vaishnaw revealed that the government has received 38 applications (including applicants like Dell, Lenovo, and Acer) for the scheme. While imports will not be licensed under the new plan, the fact that domestic manufacturing is a criterion for deciding import quotas, says that the government is staying firm on its mission to reduce reliance on foreign IT products.
What still remains uncertain:
Chandrasekhar had discussed the import management system earlier this month in an interview with the Indian Express. He had said that this system “puts the onus on the vendor to ensure that their supplies are from trusted sources only.” The vendors here would be those importing the IT hardware, but despite the new information surfacing about the import management system, it is still unclear who these ‘trusted sources’ would be.
We have reached out to the Ministry for clarification on these trusted sources and how they would be decided but are yet to receive a response.
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