India to impose laptop import restrictions to boost local manufacturing: Report

The planned restrictions, if enforced, could impact the country's IT hardware market, which is currently valued at between $8 billion and $10 billion.

In Short

• India plans to restrict laptop, tablet imports from 2024
• Move to curb imports aimed to boost local manufacturing
• India's IT market heavily reliant on Chinese imports

India is planning to impose restrictions on the import of laptops, tablets, and personal computers starting next year, reported news agency Reuters. This move is aimed at encouraging companies like Apple to increase their manufacturing efforts within India, as part of the government’s broader push to promote local production.

The planned restrictions, if enforced, could impact the country’s IT hardware market, which is currently valued at between $8 billion and $10 billion. India’s market for laptops and other devices is heavily reliant on imports, with around two-thirds of demand being met through foreign products, primarily from China.

India had previously considered imposing similar restrictions on imports but withdrew the plan last year after facing opposition from companies and lobbying efforts from countries like the United States. Since then, the government has been monitoring imports through a temporary system that is due to expire at the end of this year. Companies will be required to seek new approvals for imports starting in 2024.

“The industry has had enough time to adjust,” one of the officials was quoted in the report, indicating that the government believes now is the right time to move ahead with the restrictions.

However, the official added that India plans to hold consultations with all stakeholders, including industry leaders, starting next week. While the government is keen to implement the restrictions soon, it may delay the rollout by a few months if necessary.

India’s Ministry of Electronics and Information Technology (MeitY) is working on a new import authorisation system that will require companies to obtain prior approval before importing devices like laptops and tablets. Under the current system, companies can import devices freely after completing a simple online registration process.

India’s IT hardware market is dominated by major players like HP, Dell, Apple, Lenovo, and Samsung. With most of the demand being met by imports, India’s domestic production of laptops only accounts for Rs 5 billion of the Rs 20 billion total market size, according to consultancy firm Mordor Intelligence.

One of the ways the government plans to manage the import restrictions is by introducing minimum quality standards for laptops, notebooks, and tablets. This is part of India’s ‘compulsory registration order,’ which aims to prevent low-quality products from entering the market.

“We are looking at these restrictions because global trade agreements prevent us from taking tariff action on imports of laptops and tablets. Therefore, limiting imports through policy changes is one of the few options left,” said the second government official.

India’s electronics ministry has not yet provided an official response on the matter, and the trade ministry has stated that it will work closely with the electronics ministry and other stakeholders before making a final decision.

BOOST TO LOCAL MANUFACTURING

The import restrictions are expected to benefit local contract manufacturers like Dixon Technologies, which already has agreements with global companies such as HP to produce laptops and computers in India. Dixon Technologies is aiming to meet 15% of India’s overall demand for laptops and other IT hardware.

However, some in the industry have suggested that any import restrictions should be aligned with India’s domestic production capacity. India's production-linked incentive (PLI) scheme for IT hardware has already attracted global players like Acer, Dell, HP, and Lenovo, with many of these companies ready to ramp up local production.

The PLI scheme offers federal subsidies worth nearly Rs 2.01 billion to boost domestic manufacturing. In recent years, companies like Lenovo and Acer have increased local assembly for entry-level laptops, leading to a 4% drop in fully assembled laptop imports during the first five months of 2024, compared to the previous year.

India’s push to reduce reliance on imports is also motivated by concerns about cybersecurity and data privacy. The government has emphasised the need for “trusted sources” for electronic devices and communication technology, given the increasing risk of cyberattacks and data theft.

In line with this, India plans to implement mandatory testing for key security features in electronic devices, including CCTV cameras. This new requirement will come into effect in April 2025 and is part of India’s broader strategy to ensure the security of its digital infrastructure.