"Waiting with trepidation" and "worried" are among the terms used by Jason Oxman, the honcho of the Information Technology Industry Council (ITIC) which represents major global laptop makers, to describe the sentiment of such manufacturers on the future of India's import management system for laptop, PCs and tablets.
The system, which has allowed free import of such items, is scheduled to expire at the end of September. Post that, as Moneycontrol earlier reported, it is unclear whether the government will revert to the initial plan of imposing restrictions on such imports.
The restrictions
On August 2023, the Centre announced that it would restrict free import of laptops, tablets, personal computers and so on, and companies would require licences for importing such products. 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, and also to ensure a trusted supply chain for such items.
The policy faced stiff opposition from global tech giants such as Dell, Acer, Samsung, Panasonic, Apple, Lenovo and HP, who argued it would harm their operations. Responding to industry concerns, the government rolled back the restrictions the next month, extending the free import window by a year to September 2024.
Oxman, who was in New Delhi for around a week, met with officials from the ministries of electronics and information technology, communication, office of the principal scientific advisor, and even the Prime Minister's Office (PMO).
In these meetings, Oxman, president and chief executive officer of ITIC, conveyed that the industry is "waiting with trepidation" for some kind of clarity on the future of the import management system.
The ITIC's members include laptop, PC and tablet makers such as Apple, Dell, Google, HP, Lenovo, Microsoft and Toshiba.
The uncertainty
"We don't know what's going to happen after September 30th, because companies, even trusted companies, are required to register their products and get the import permissions. And 11 days from now, this program expires. And there's a very real risk that if this program (licensing norms) is reinstated, all of these products are cut off," Oxman told reporters.
Oxman, who in his career spanning over three decades has worked in US government bodies such as the Federal Communications Commission, apart from various stints in the industry in various roles, termed the government's intention to bring licensing norms as "coming from a good place".
He opined that "trusted" supply chains for such items have always been global. "The government has the right ideas in mind, but what I think it didn't recognise, and this is where we advocated for a change, is that supply chains are global and trusted supply chains are global as well," he said.
While citing the example of the US, Oxman said, "Many of the world's top PC makers like Dell and HP do not manufacture in the US, yet they're trusted brands with global supply chains that deliver essential tech to consumers and businesses.
"The same goes for industries like televisions, which haven't been made in the US since the 1980s. The government doesn't restrict access just because these products aren't made domestically—it's simply more expensive to manufacture them in the US, which isn't a manufacturing hub," he added.
The hurdles
Oxman paints a very obscure future for the Indian electronics ecosystem if the government goes back to the licensing norms and if it directs the industry to establish supply chains for such items in the country.
"Global supply chains can't be changed like that. And you'll recall the original proposal imposed a very tight timetable and said, if you're not manufacturing all of these products in India in the next 90 days, we're going to shut off imports. And as a practical matter, you can't establish that kind of capability," he said.
He said, "The PM (Prime Minister) has done such a remarkably, truly amazing job of connecting people to the digital economy in India. There are 900 million Indian citizens who have access to the internet. There are 2 billion mobile devices in India. There are three times more people online in India than there are people in the United States...
"And if you impose the kind of restrictions that were proposed last year under this program, nobody's going to be able to access any of those services. Nobody's going to be able to access any of these capabilities, access any of these broadband services. India will be cut off from the global economy," Oxman warned.
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