The Indian government, with immediate effect, has put immediate restrictions on the import of personal computers, laptops, and tablets in its attempt to promote the local manufacturing. In April-June, the electronics imports of computers, tablets, and laptops was increased 6.25% YOY at $19.7 billion.
The Directorate General of Foreign Trade has issued a notification and informed that from now onwards a valid license will be required for the imports of these items. However, it also clears up that the restrictions do not imply the imports of these electronic goods under baggage rules.
Further, the DGFT clarifies that the requirement of a license is exempted from the purchase of a single unit of personal computer, laptop, and tablet including the online purchase of the said items. However, appropriate taxes will be applicable on such kinds of imports as well.
The notification also clarifies that a maximum of 20 units of the said items can be imported in case it is being done with a valued purpose such as testing, benchmarking, research and development, and repairing. The notification also states that import licensing exemption is granted for the mentioned electronics, as they are considered essential components of Capital Goods.
Encouragement to Local Manufacturing
The recent DGFT notification is expected to promote domestic manufacturing in line with the "Aatmanirbhar India" initiative. According to Navkendar Singh, Associate Vice President of IDC India, the aim of this measure is to encourage local manufacturing.
“However, our ecosystem isn’t ready yet for an assembly of this magnitude. Vendors ship in close to 2 million notebooks every quarter with around 3/4th out of this imported. Also, the almost entire volume of premium notebooks are imported,” said Mr Singh.
The move will surely "import substitution of certain goods that are imported heavily," stated Madhavi Arora, the economist, Emkay Global.
India has been encouraging local manufacturing and for that production-linked incentives are given across two dozen sectors such as electronics. The country has been promoting the ‘make in India’ move to make India a powerhouse of the worldwide electronics supply chain.
