The future of India's policy around laptop imports maybe in a limbo as a decision on whether to revert to the original licensing regime is proving to be a knotty affair thanks to competing concerns around price pressures on consumers and the aim to enhance local manufacturing capacities.
While the Ministry of Electronics and Information Technology (MeitY) is yet to make up its mind on whether the country needs to go back to the original plan of a licensing regime, the Commerce Ministry is relatively more certain about the need for such a system, ministry officials told Moneycontrol.
A Commerce Ministry official, on the condition of anonymity, said, MeitY is yet to take a call on this issue given that they have to look into several factors before giving a green signal, including whether India has the domestic infrastructure in place, and if there is certainty that consumers won’t be put to any inconvenience due to an increase in prices of products, because of a licensing regime.
As of now, MeitY is studying the import data, based on which it will recommend a decision to the Commerce Ministry on whether such a system is needed, a second official said.
The Commerce Ministry and MeitY did not respond to mails seeking a comment on this development.
Flip flops
To recap, on August 2023, the Centre announced that it would restrict free import of laptops, tablets, personal computers and so on. This was seemingly done to provide a greater opportunity for Indian manufacturers given that the country does depend heavily on inbound shipments of such products.
Such a regime was said to particularly hurt global tech giants such as Dell, Acer, Samsung, Panasonic, Apple, Lenovo and HP.
However, after an outcry from the industry, in September 2023, the government decided to roll back these plans and extend free import of such items till September 2024.
Instead, in the place of a licensing regime, the government introduced the 'import management system’, where IT hardware companies needed to register and disclose data related to their imports. It is this data, that MeitY is currently studying.
In the meantime, India's inbound shipments of electronic goods, which includes laptops, tables, and personal computers, accounted for nearly $21 billion between April and June 2024, an increase of 11 percent on year.
The first official said that when the government first rolled out these restrictions on imports, including on laptops and tablets, the decision was projected in a way that India was going back to the licensing regime.
What now?
The Commerce Ministry is of the view that such import restrictions have helped certain sectors in the past and increased India’s manufacturing capacity in those areas.
“There are many commodities in which India has implemented a graded import reduction plan – tyres, toys, refrigerators. The results of that are also visible. We have a vibrant tyre sector in our country, which has started exporting. Now refrigerators and ACs are getting manufactured in India,” this official said.
The Commerce Ministry is yet to hear from MeitY on the next steps around import curbs and laptop and related products. And, the update is taking longer than expected.
According to another MeitY official, it is still early days, and a call on this will only be taken later, indicating that the ministry is in no hurry to firm up a decision on this subject.
“MeitY was supposed to give us an update on what is the next step. If they ask us to tweak the existing system we will tweak, if they ask us not to tweak and go ahead with the existing system we will go ahead. At that time, MeitY was very clear that we want to introduce graded reduction in imports but then we haven’t really heard anything from them regarding the future course of action,” the first official said.
Concerns worldwide
Not just the industry, but the United States had also expressed concerns over India’s decision to impose higher scrutiny over imports of such electronic products.
Back in January, US Trade Representative Ambassador Katherine Tai urged India to ensure that the end-to-end online system currently in operation and related policies on the import of laptops do not restrict trade going forward.
In response, India’s Commerce Minister Piyush Goyal had then described the country's objectives behind implementing these policies, including those related to national security concerns.
“We should do what is (in) the best interest of our country. US will raise concerns. There are many countries that have raised concerns on European Union’s carbon tax as well. But are they holding back because other countries have raised concerns?” the first official asked.
Given that the proposal to put a licensing regime on import of laptops and related products came originally from MeitY, the Commerce Ministry is now on a wait-and-watch mode on a decision that will finalise the way ahead for India’s stance on this much-debated issue.
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