Govt imposes import curbs on laptops, computers for security reasons; to boost domestic manufacturing

The decision is likely to lead to an increase in prices of PCs, Laptops & Macs, according to industry experts.

PTI, New Delhi Aug 3, 2023 :  The government on Thursday imposed import restrictions on laptops, tablets, and certain types of computers with immediate effect for security reasons and the need to promote domestic manufacturing.

The move will also curtail inbound shipments of these goods from countries like China and Korea.

Importers of these items would now have to seek permission or license from the government for their inbound shipments.

A senior government official said that there are a variety of reasons for imposing these restrictions but the primary is “to ensure that the security of our citizens is fully safeguarded”.

The official also said that internet penetration is increasing in the country in a bigger way and in this background Indian citizens need to have an environment and ecosystem, where they are not exposed to machines or instruments which might have security risks.

“Some of the hardwares could potentially have security related issues and could compromise sensitive and personal data, we have taken into account few of those goods,” he added.

The Directorate General of Foreign Trade (DGFT) in a notification, however, said certain exemptions have been given against these curbs.

“Import of laptops, tablets, all-in-one personal computers, and ultra small form factor computers, servers… is ‘restricted’ with immediate effect,” it said.

The official further said that “safety is the top most priority” of the government and the move is in compliance with the rules of the World Trade Organisation (WTO).

Under the transition provisions of the foreign trade policy (FTP), if the bill of lading and letter of credit has been issued or opened before August 3, that import consignments can be imported.

An importer can apply for a license from August 4. The trader should have to be a regular importer to get a license.

“The idea is not to ban imports but to regulate the inbound shipments of these goods,” the official said.

When asked if the move would have an impact on domestic prices, the official said “no”. However, industry experts have flagged apprehensions that it could lead to price rise of these instruments.

The restrictions are also there on micro computers, large or mainframe computers, and certain data processing machines. Import of all these items would be allowed against a valid license.

It added that there is an exemption from seeking import licensing for up to 20 items per consignment for R&D, testing, benchmarking and evaluation, repair and return, and product development purposes.

These curbs are also not applicable to imports under baggage rules, under which one old and a new laptop is allowed in a baggage.

Over and above this, exemptions from import licensing requirements are also provided for import of one laptop, tablet, personal computer, or ultra small form factor computer which are purchased from e-commerce portals, through post or courier.

However, these imports shall be subject to payment of duty as applicable, it said adding exceptions would also be there if these goods are used as an essential part of capital goods like a machine.

According to a report by think-tank Global Trade Research Initiative (GTRI), India’s 65 per cent imports from China are limited to just three product groups — electronics, machinery and organic chemicals.

It has stated that India is critically dependent on China for day-to-day use and industrial products like mobile phones, laptops, components, solar cell modules, and ICs.

The government has taken several steps to boost domestic manufacturing of electronic items such as rolling out of the production-linked incentive scheme and increasing customs duties on the number of electronic components.

Leading electronic brands which are sold in the market include HCL, Samsung, Dell, LG Electronics, Acer, Apple, Lenovo and HP.

India imports about USD 7-8 billion worth of these goods every year.

The country has imported personal computers including laptops worth USD 5.33 billion in 2022-23, as against USD 7.37 billion in 2021-22. Imports of certain data processing machines stood at USD 553 million in the last fiscal, against USD 583.8 million in 2021-22.

Similarly, imports of micro computers/processors stood at USD 1.2 million in the last fiscal against USD 2.08 million in 2021-22.