'There will be transition period': Rajeev Chandrasekhar clarifies on laptop, PC import curbs

Rajeev Chandrasekhar said the policy is "not at all about licence raj".

While emphasising the need to bring out a policy that restricts the import of laptops and personal computers (PC), Union Minister of State for Electronics and Information Technology Rajeev Chandrasekhar on August 4 said "there will be a transition period" for implementing the new norms.

"There will be a transition period for this to be put into effect which will be notified soon," Chandrasekhar tweeted, a day after the Union commerce ministry, via a notification, announced that computer manufacturers will now require a valid licence and would have to pay duty to import PCs, laptops, tablets, servers etc.

The exemption will be provided on the import licence only for up to 20 of such items per consignment for the purpose of research and development, testing, benchmarking and evaluation, repair and re-export and for product development, as per the notification.

A senior government official, who spoke to news agency Reuters on condition of anonymity, said the implementation of the curbs will be delayed by at least a month.

Chandrasekhar defended the policy, claiming that the government's objectives are to ensure that "trusted hardware and systems" are used in the Indian tech ecosystem "to reduce import dependence" and to increase "domestic manufacturing of this category of products".

"This is not at all about licence raj," the minister stressed. His clarification came shortly after reports said that Apple, Samsung Electronics and HP Inc are among the big names that are freezing new imports of laptops and tablets to India in response to the curbs.

Government sources who spoke to CNBC TV-18 clarified that the importers would be extended support, and goods in transit would not be impacted. The Directorate General of Foreign Trade (DGFT) will provide for the issuance of licences within minutes, and clarify modalities for rejection of the licence applications, the persons privy to the development added.

The move taken by the government is unlikely to hike the prices in this segment of electronics, they further added. Experts who spoke to Moneycontrol, however, said there could be near-term price hikes even as the policy would boost the 'Make in India' initiative in the long run.

"There could be some price increase by enterprises in the short term for some of the products like by Apple whose products are 100 percent imported. But for Dell and HP, this could play up well as they already have manufacturing set-up here," Neil Shah, partner at Counterpoint Research, said.

According to IDC's Associate Vice President, Devices Research, Navkendar Singh, this should not be a surprise to the industry and the industry observers as this was bound to happen at one point. The government has been telling the industry to start manufacturing in India for a long time and the majority of them are assembling a lot of desktops here, he said.

“India ships around 2 million laptops a quarter, and out of that, almost 1.5 million are imported. Every premium laptop is imported. The volumes are huge, there is also an import-export imbalance here. But currently, we don’t have the capacity to actually expand manufacturing immediately,” he said.