Importers of computers, tablets, servers to get clarity on future import regime after elections

Importers of seven IT hardware items including laptops, personal computers and tablets will stay in suspense for some more time over what India’s import policy on the products would be once the existing notification on obtaining automatic authorisations through an `import management system’ lapses on September 30, this year. A decision on the matter has now been deferred till after the general elections, according to officials.

“The industry, which includes multinationals such as Apple, HP and Dell, is keen to know what the import regime for IT hardware items would be after September 30. The Ministry of Electronics and Information Technology (MeitY) has been analysing import data being provided by the industry over the last six months. But it has been now decided that a call will be taken on the matter only after the general elections as the policy could have a major impact on both domestic production and imports and also determine the success of the PLI scheme,” an official tracking the matter told businessline.

India adopted a new `import management system’ for monitoring shipments of seven items including laptops, tablets, PCs, ultra small form factor computers and servers, large or mainframe computers and automatic data processing machines since October 1, 2023. Free imports are no longer allowed. Instead, importers have to apply to the Directorate General of Foreign Trade for import authorisations that are issued automatically once the application is submitted online.

Despite being under the restricted category, the new import regime for the identified IT hardware items has been quite liberal, the official pointed out. “Under the system, importers just provide information on the number of items they seek to import and from where. They are then issued authorisation to import as many they want since there is no cap on numbers,” the official said.

However, there is no clarity on whether the same regime would continue after September 30 or more restrictions would be brought in, the official added.

At the WTO, India has explained to members who were raising questions on the import policy, which includes the US, that it was aimed at ensuring supply chain resilience and addressing national security concerns. Of the total imports of the seven items worth  $8 billion in 2022-23, about $5 billion was imported from China, per available data.

Another important reason behind import monitoring was to keep a check on imports from China as a big chunk of imports is sourced from the country and security threat perceptions are much more prominent there than others, some officials informally explained.

Additionally, a close check on imports could also benefit the PLI scheme on IT hardware that incentivises domestic manufacturing of items such as laptops, tablets, servers and PCs.

“The import management system is giving the government a variety of data such as the total number of traders engaged in imports as well the number of manufacturers in the country for all the identified products. What remains to be seen is the conclusion MeitY reaches from the data and the policy direction it gives,” the official said.

Since the general elections are scheduled to be over in June, 2024 and a new government would be in place subsequently, a policy decision on the import regime after September 30 can be taken only in June-end or later.

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