Why Did The Government Impose Restrictions On Laptops, Tablets Imports?

The government on Thursday imposed import restrictions on laptops, tablets, all-in-one personal computers, ultra small form factor computers and servers with immediate effect. This was with the primary objective to promote local manufacturing.

According to a notification from the Directorate General of Foreign Trade (DGFT) the exemption from import licensing is provided for up to 20 items per consignment for R&D, testing, benchmarking and evaluation, repair and return, product development purposes.

The move is expected to cut imports from countries like China and offer a push to Make In India.

Products under restrictions need license or permission from the government.

The notification said that the restrictions will also be there on micro computers, large or mainframe computers, and certain data processing machines.

However, these curbs are not applicable to imports under baggage rules.

"Exemption from import licensing requirements is provided for import of 1 laptop, tablet, all in one personal computer, or ultra small form factor computer, including those purchased from e-commerce portals, through post or courier. Imports shall be subject to payment of duty as applicable," it said.

Make In India push

This move by the government is in alignment with its plan to establish India as a global manufacturing hub with a major spotlight on the electronics sector. The government through this move is also trying to boost local manufacturing across the sectors.

One of the major reasons for this decision was to reduce the reliance on other foreign markets and encourage growth of local manufacturing capabilities.

Another reason for this decision was the increasing electronic imports. In the last quarter that is April-June the import of laptop, computer and tablets increased by 6.25 per cent to $19.7 billion in comparison to the previous year.

Impact of import restrictions

One of the major consequences of this policy change is that the costs of laptops, computers and tablets will go through serious revamp as they will reduce due to the low import costs.

However, the decision by the government could have a significant impact on companies like Dell, Apple, Acer, Lenovo, Samsung, Panasonic and HP, as the companies without an existing local manufacturing facility in the country will have to consider establishing a new manufacturing unit in India.