After the Indian government’s abrupt policy changes regarding the import of laptops, personal computers, tablets, and other electronic devices, officials from the Ministry of Electronics and Information Technology (MeitY) held a meeting with representatives from leading electronics hardware companies to address concerns about India’s trade policy and promote domestic manufacturing.
Government Initiatives and Industry Response: Navigating Import Restrictions on Electronic Devices in India
Initially, the Directorate General of Foreign Trade (DGFT) issued a notification on August 3, requiring companies to obtain a license for importing such devices, effective immediately. In response to the negative impact, a follow-up notification was issued the next day, providing the industry with a three-month grace period before imposing restrictions on imports starting from November 1.
During the meeting, MeitY asked companies to submit their plans for manufacturing in India and offered suggestions on how to control the import of laptops and personal computers. Government officials clarified that the sudden import restrictions were not the intended outcome, leading to the creation of the three-month window.
MeitY also sought information about the industry’s manufacturing and investment strategies in India. The government expects the companies to propose ideas over the next month to enhance local production and outline their expectations from the government.
Representatives from top hardware companies, including Apple, Dell, HP, and Acer, attended the meeting, along with MeitY officials led by Rajeev Chandrasekhar, the Minister of State for Electronics and IT.
Challenges and Opportunities in India’s Electronics Industry: Addressing Import Concerns and Promoting Domestic Manufacturing
One of the primary concerns expressed by the industry was the dislike for licensing requirements. Additionally, there was apprehension that the restriction would affect the import of graphics processor units (GPUs), essential for Indian start-ups working on artificial intelligence (AI) compute capabilities. These GPUs fall into the category of automatic data processing machines.
The IT Ministry plans to communicate with the DGFT to reconsider the classification of IT hardware, particularly GPUs, advocating that GPUs should not be treated the same as regular IT hardware.
The initial DGFT notification caused significant disruption, with major companies like Apple and Samsung freezing imports until the issue was clarified. The timing of the policy change, just before the festive season, compounded the challenges faced by manufacturers already dealing with an oversupply in the global market and limited triggers for sales growth.
Despite India’s efforts to establish itself as an electronics manufacturing hub, it still heavily relies on imports, especially for laptops and personal computers. More than 75% of India’s imports in this category during the 2022-23 fiscal year were from China.
While some sources suggested that the government’s action was driven by the slow progress of the Production-Linked Incentive (PLI) scheme for IT hardware, officials from the IT Ministry contested this claim. They reported that 44 companies had registered for the scheme, and some, including HP Enterprises, had submitted detailed investment and manufacturing plans.