The new restriction on Personal Computers/laptop imports: Why the move, and its potential impact

What does the notification for the restriction on imports state?

Import of laptops, tablets, all-in-one personal computers, and ‘ultra small form factor’ computers and servers falling under HSN 8741 will be ‘restricted’ and their import would be allowed against a valid licence for restricted imports, the notification said.

Also, exemption from import licencing requirements has been given for import of one 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 will attract payment of duty as applicable, it said.

The government has also exempted laptops, tablets, all-in-one personal computers, and ultra small form factor computers from import licencing requirements if they are essential part of capital goods.

For the purpose of R&D (research and development), testing, benchmarking and evaluation repair and re-export, and product development purposes, the government has given exemption from import licence for imports up to 20 items per consignment. The condition, however, would be that these imports will be allowed only for use for the stated purposes and not for sale. “Further, after the intended purpose, the products would either be destroyed beyond use or re-exported,” the notifications said.

It also said that the licence for restricted imports shall not be required for the repair and return of re-import of goods repaired abroad, as per the Foreign Trade Policy.

Why have the restrictions been imposed?

The move is being seen as a direct boost to the Centre’s recently renewed production-linked incentive (PLI) scheme for IT hardware. A senior government official said that the measure is to push companies to manufacture locally in India, as the country looks to strengthen its domestic production prowess in the electronics sector.

The scheme was revised in May with an outlay of Rs 17,000 crore, more than doubling the budget for the scheme that was first cleared in 2021. The push is aimed at makers of laptops, servers and personal computers among others – since a majority of the imports in these segments are from China.

India has seen an increase in imports of electronic goods and laptops/computers in the last few years. During April-June this year, the import of electronic goods increased to $6.96 billion from $4.73 billion in the year-ago period, with a share of 4-7 per cent in overall imports.

Of the seven categories restricted for imports by India, the majority share of imports is from China. During April-May, the latest period for which country-wise data is available, India’s imports from China for these seven categories of restricted imports were valued at $743.56 million, down 5.6 per cent from $787.84 million.

The highest share of imports is in the category of personal computers including laptops, and palmtops, under which imports from China stood at $558.36 million in April-May this year as against $618.26 million in the year-ago period. China accounts for roughly 70-80 per cent of the share of India’s imports of personal computers, laptops.

On an annual basis, India’s imports of personal computers, and laptops from China had dropped 23.1 per cent in 2022-23 to $4.10 billion in 2022-23 from $5.34 billion in 2021-22. However, in the previous two financial years, 2021-22 and 2020-21, there was a sharp surge in imports of personal computers, laptops in 2021-22 and 2020-21 from China, with a year-on-year increase of 51.5 per cent to $5.34 billion in 2021-22 and 44.7 per cent to $3.52 billion in 2020-21.