Laptop, PC imports may be allowed only from ‘trusted’ places

Beyond laptops, personal computers and servers, the directive could be applied on a large range of finished IT hardware equipment including 5G sensors, which are predominantly being imported from China.

The move comes weeks after the Centre’s attempt of imposing a licensing requirement for the import of laptops and personal computers faced a strong pushback from the industry, forcing it to delay the implementation of the directive until October 31.

Once finalised, the import management system is expected to replace the licensing requirement.

Confirming that a proposal to allow IT hardware imports only from trusted sources is currently under consideration, Minister of State for Electronics and IT Rajeev Chandrasekhar told The Indian Express, “With the scheme for IT hardware manufacturing, there is going to be a significant momentum in the manufacturing of laptops and servers in India. In addition, we recognise that there will always be an import component to meet domestic requirements, especially in the high-performance end”.

“To that end, we want to put in place an import management system that puts the onus on the vendor to ensure that their supplies are from trusted sources only. We see the foreign supply chain becoming more trusted and its sources much more reliable than what it is today,” he said.

New Delhi typically never mentions China by name whenever it imposes a trade barrier on imports from the country; it is cautious of the significant influence Chinese exports have on the Indian economy, something the government wants to progressively change.

There is precedence to this idea of allowing imports only from trusted sources. In June 2021, the Central government launched the ‘trusted telecom portal’ and signalled the implementation of the National Security Directive on Telecommunication Sector (NSDTS).

Under the directive, telecom companies are mandatorily required to connect in their networks only those new devices which are designated as “trusted products” from “trusted sources”. Post the 5G spectrum auction last year, operators like Reliance Jio and Bharti Airtel have signed agreements with companies like Ericsson and Samsung, excluding Chinese majors Huawei and ZTE.

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.

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.

Last month, as the window for the Centre’s production-linked incentive (PLI) scheme closed, 40 companies – including Dell, HP, Asus, Acer and Lenovo – applied to participate in the programme to manufacture laptops, computers and servers in India. Apple and Samsung, however, have opted to skip participation.

The Centre had more than doubled the IT Hardware PLI in May this year to Rs 17,000 crore since it was first cleared in 2021 with an outlay of Rs 7,350 crore. The first version of the scheme was a laggard with only two companies – Dell and Bhagwati – managing to meet first year (FY22) targets, and the industry calling for a renewed scheme with an increased budgetary outlay.

The average incentive over six years will be about 5 per cent of net incremental sales compared with the 2 per cent over four years offered earlier. Companies that locally manufacture certain components including memory modules, solid state drives and display panels will also get additional incentives under the restructured scheme. There will be flexibility in choosing the base year as well. Officials said the total benefits – given the sales projections by companies – could add up to PLI of Rs 22,880 crore.