India is temporarily rescinding its plan to impose restrictions on laptop imports, months after suddenly announcing such plans which drew criticism from the industry and the US.
Scrutiny over importers
“India will not impose restrictions on laptop imports,” Trade Secretary Sunil Barthwal said on Friday.
He said the government wants to keep a close eye on importers, but will not be imposing any bans.
Further, it is setting up a system wherein it will monitor the quantity of imports and where they originate from.
Background
The import licensing regime, announced on Aug. 3, aimed to “ensure trusted hardware and systems” enter India.
It looked to address security issues, boost local manufacturing and cut down on imports from China.
As part of this, it imposed restrictions on the importation of servers, laptops, tablets, and personal computers.
The Directorate General of Foreign Trade (DGFT) announced that while the import of these commodities will be allowed with a license, some use cases have been exempted from the restrictions.
Encouraging local manufacturing
This is part of its effort to encourage businesses to manufacture domestically.
It achieved success in attracting several well-known smartphone manufacturers to assemble and manufacture their products in India.
Chipmakers and semiconductor manufacturers also expressed interest in the country.
What the restrictions comprise
The restrictions include mailing, using couriers, or purchasing an individual laptop, tablet, desktop, or ultra-compact computer from an online retailer and shipping it to a recipient abroad.
Around 20 of these items have been exempt from an import license per consignment for purposes like research and development, testing, benchmarking and evaluation, repair and re-export, and product development.
Imports will be permitted only if the imported goods are used for the stated purposes and not for sale.
From “trusted regions” only
The Centre had also mulled making it mandatory for finished IT hardware, like laptops, personal computers, and servers, to be imported only from ‘trusted regions’, in an aim towards cutting down imports from China due to tensions between the two nations.
The proposal is currently in the draft stage and is referred to as an “import management system.”
This would enable the government to monitor the sources of IT hardware imports.
Why the backlash?
Implementation of the curbs announced in August got deferred till November 1 following opposition from the industry and the States.
“We are only saying that somebody who is importing laptops, have to be under close watch, so that we can look at these imports. It is basically monitoring, which we are doing. It has nothing to do with restrictions as such,” Barthwal said.
It would affect companies like Dell, HP, Apple, Samsung and Lenovo.
Import management system coming soon
Directorate General of Foreign Trade Santosh Kumar Sarangi said the government is holding consultations with the industry and a new order on laptop imports will be announced by the end of October, without disclosing further details.
He said there will be an import management system (mentioned earlier), which will come into place from November 1.
Work is in progress and hopefully it will be in place before October 30, he said.
