Senior officials from the Ministry of Electronics and Information Technology (MeitY) are set to meet with original equipment manufacturers (OEMs) of PCs, tablets, and laptops on Tuesday. The meeting will address concerns over the recent import licensing policy for these products, announced last week.
MeitY is anticipated to hold two separate meetings; one with major global electronics firms such as Dell, HP, and Apple, and another with domestic contract manufacturers who provide local product assembly capacities to these firms, sources revealed to Business Standard.
In a surprising move last Thursday, the government announced immediate restrictions on the imports of laptops, tablets, and personal computers in an effort to stimulate local manufacturing. This announcement took large computer manufacturers, including Dell, HP, and Apple, by surprise.
The import of electronics products, such as small tablets, laptops, and all-in-one PCs, will now require a valid licence. According to an updated notification, import consignments can be cleared without a licence for restricted imports until October 31, 2023.
Although the three-month delay in the licensing mandate for PC imports has given OEMs a reprieve, PC makers assert that this extension is insufficient for shifting their supply chains to India.
An executive from a large PC manufacturer, speaking anonymously, explained, “On one hand, they have introduced the IT Hardware PLI, allowing companies to set up manufacturing operations in the country. On the other hand, they are tightening the noose with this short three-month extension.” He further added that for those companies keen to set up manufacturing operations in India, either an exemption from the restrictions is needed, or more time to establish manufacturing units. “It takes eight-nine months to set up a factory, depending on its scale. It’s not feasible to begin manufacturing within just three months,” he pointed out.
OEMs are also expected to seek clarification on the import quota. With the festival season approaching, demand for PCs is predicted to increase. The imposition of a limit on the number of devices that can be imported could pose difficulties for many manufacturers.
The restrictions are also likely to increase the compliance burden on OEMs like HP, Dell, and Lenovo, who, despite having manufacturing units in India, depend on component imports.
Companies seeking the necessary import licence will need to provide details concerning the origin of consignments, the number of items, and their past import records, which will add additional compliance hurdles in device procurement.
The government has indicated that the decision to introduce licensing requirements for imports of IT products is aimed at allowing only trusted and secure electronic devices in India, and also at boosting domestic manufacturing aided by the IT hardware production linked incentives (PLI) scheme. To date, 44 electronic companies have already applied for incentives under the IT hardware PLI 2.0 scheme, and 2 applications have been approved.
“We are looking at creating a safe and secure environment for our citizens and domestic manufacturers. With this in mind, this notification has been issued by DGFT under which the companies can import the IT hardware… But we will have some kind of a licensing mechanism,” a senior government official informed reporters, highlighting that the government is eager to permit only trusted devices.