India considers restricting imports of laptops, tablets, and PCs beginning in January: Here's why
India attempted to restrict imports of electronic devices last year, but the plan was abandoned due to opposition from manufacturers. The government now believes it has provided importers with enough time to adapt.
India is planning to limit imports of laptops, tablets, and personal computers starting in January, according to two government sources. This initiative aims to encourage companies like Apple to enhance domestic manufacturing capabilities. If executed, the plan could impact an industry valued between USD 8 billion and USD 10 billion and alter the dynamics of the IT hardware market in India, which currently relies heavily on imports.
A similar proposal to restrict imports was retracted last year due to backlash from companies and lobbying efforts from the United States. For the last year, India has monitored imports under a system that is set to expire and has requested firms to seek new approvals for imports next year. The government believes that the industry has had sufficient time to adjust, according to the sources, who requested anonymity due to the private nature of the discussions.
One source indicated that New Delhi will begin consultations with relevant stakeholders next week and may postpone the implementation of import restrictions for a few months if necessary. The Ministry of Electronics and Information Technology (MeitY) is developing a new import authorization system that will require companies to obtain prior approval for their imports.
Currently, laptop importers can bring in devices freely after completing automated online registration. The industry is primarily comprised of companies such as HP, Dell, Apple, Lenovo, and Samsung, with approximately two-thirds of Indian demand being satisfied through imports, a considerable portion of which comes from China. According to consultancy Mordor Intelligence, India's IT hardware market, which includes laptops, is valued at nearly USD 20 billion, with USD 5 billion derived from domestic production.
It has been suggested that limits on imports should align with India’s domestic production capacity. The country’s key production incentive scheme for IT hardware has attracted participation from global firms such as Acer, Dell, HP, and Lenovo. Many approved participants are reportedly prepared to begin manufacturing, according to statements from India’s electronic minister made last year.?
India has allocated subsidies amounting to nearly USD 2.01 billion to promote domestic production. Research firm Counterpoint indicates that imports of fully assembled laptops in the first five months of 2024 decreased by 4 percent compared to the same period the previous year, with companies like Lenovo and Acer increasing local assembly for entry-level laptops.
India has emphasised the importance of "trusted sources" for electronics and communication devices, particularly in light of growing concerns regarding cyberattacks and data security. In 2022, Prime Minister Narendra Modi underscored the need to reduce reliance on foreign countries for communication technology, including servers. Starting April 2025, India will implement mandatory testing of "essential security parameters" for all CCTV cameras.
Inputs from Reuters