Govt seeks updates from hardware PLI beneficiaries

The government is keeping a hawk eye on imports of laptops, tablets, and servers, etc., focusing on the 27 companies chosen under the production linked incentive (PLI) scheme 2.0 for IT hardware to get monthly updates on the progress of their local manufacturing plans.

The government scrutiny comes as the Centre prepares to replace the current import management system, which will expire in September, with an import authorisation mechanism, as part of its aim to make the country a global manufacturing hub. As part of the monthly review report by the ministry of electronics and IT (Meity), all the PLI-approved companies are required to submit all updates concerning manufacturing like establishment of assembly lines, investments, and jobs.

Companies such as Dell, HP, Foxconn and Flextronics are among 27 companies who were cleared by the government to receive sops under the PLI 2.0 scheme for IT hardware.

"We are in regular touch with all the companies and seeking updates on their plans submitted to us last year," an official privy to the details told ET.

Under the new regime, firms without local manufacturing capabilities will be discouraged by restricting the quantity of imports through a quota-based system. But those with local production capacity may be allowed to continue importing without any difficulty.

"The objective is to build an IT hardware manufacturing ecosystem in the country and companies need to be supported for this. But if one solely wants to rely on imports with no local manufacturing, it won't serve the purpose," said the official cited above.

All firms can import an unlimited quantity of IT hardware after registering themselves. The government only monitors inbound shipments through the import management system. However, when the import authorisation mechanism kicks in from October, there would be certain factors that the companies need to comply with.

Officials said import authorisation will be given to firms based on three parameters - import value of previous year or an average of past three years for IT products, domestic manufacturing of IT hardware devices and exports of electronics goods.

Companies having a large manufacturing base in India will get an edge in importing products as compared to those that don't have any production capacity.

Many companies are expected to start production by April next year. But the government can factor in details submitted by these companies while granting import authorisation.

"We do understand that it takes time to set up a manufacturing unit. If the companies are working as per the schedule submitted to us, it will be taken into account while giving authorisation for imports," a second official said.

In an August 3, 2023 notification, the directorate general of foreign trade cited security concerns while announcing that imports of certain IT hardware products such as laptops, tablets, PCs, and servers etc would fall under the restricted category and would, therefore, require a licence, effective immediately.