PC import curbs

TOPICS COVERED: Indian economy and issues relating to planning, mobilization, of resources, growth, development and employment.

Context:

Recently, the government restricted the import of laptops, tablets, all-in-one personal computers, ultra-small form factor computers and servers.

Key details:

The import of these products would be allowed against a valid licence for restricted imports.
Import of all items categorised under the Harmonised System of Nomenclature (HSN) 8471, that is, automated data processing machines and units, would be restricted.
A valid licence would be required to import them for sale to consumers.
Exemption to licensing requirements would be extended in four circumstances.
First, purchasing a single unit of the mentioned products on an e-commerce website that are being brought into the country through post or courier.
It would only draw relevant duties.
This also applies to (reimport of) products meant for repair and return.
Permission has been given to import up to 20 such items in a consignment for purposes entailing research and development, testing, benchmarking and evaluation, repair and re-export or product development purposes.
Following their intended use, the products would either have to be destroyed beyond use or re-exported.
Items may be imported if they serve as an essential part of an entity’s capital good.

Need of the move:

The key objectives are:

to reduce the dependence on imports,
ensure the country has access to trusted hardware and systems and
increase domestic manufacturing of products.
On domestic manufacturing, the government had introduced the production-linked incentive (PLI) Scheme 2.0 for IT hardware.

Status of domestic production:

Domestic production of electronic goods increased to $87.1 billion in 2021-22 from $49 billion in 2016-17, registering a compound annual growth rate (CAGR) of 15%.
The country’s imports with respect to the products in discussion stood at approximately $10.1 billion in FY 2022-23, about 13% lower on a year-over-year basis.
The demand for laptops and tablets were being largely met through imports.

Way forward:

Concerns mostly revolve around accessibility to stocks and a potential impact on prices.
Global companies operating in India have sought that the implementation be deferred by 9-12 months to enable them time to ramp up domestic production and understand the licensing process.
For the longer term, vendors would be able to arrange for the required licences.
Customers will advance their purchases anticipating price increase going forward.

SOURCE: THE HINDU, THE ECONOMIC TIMES, PIB

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