IT hardware companies seek clarity on import licensing process

The IT hardware industry wants the government to clarify operational modalities around import licensing at the earliest so that it can make contingency plans, said senior executives.

For instance, they said, currently there is no clarity on the criteria, details around quota, validity of licence, whether single or multiple licences are required for different ports, whether goods from special economic zones to domestic traffic area (DTA) and export-oriented units to DTA are exempt from import licensing, and on the nodal and grievance officers concerned.

The industry has welcomed the decision to defer the deadline to November 1 to implement the restrictions on imports of laptops, tablets, all-in-one-personal computers, ultra-small factor computers and servers. But it wants urgent clarity on the operational modalities at the earliest to be able to transition to the new regime.

“It’s a welcome step to give the extension but it needs to be seen if three months are enough or more time is required to put supply chains in order. We are waiting for clarity around operational details soon,” an executive of a leading IT hardware company said on condition of anonymity.

The industry also wants some items, such as high-end servers, laptops and other sophisticated devices, to be exempted from the restricted list since they are not manufactured in India. “If all the items are put in the restricted category, it will impact the consumers and businesses. There are certain items that need to be exempted, a list of which can be shared with the government,” said a second executive, who did not wish to be identified.

The import licence notification already has exemptions such as the import of one laptop, tablet, all-in-one personal computer or ultra-small form factor computer as personal baggage.

Also exempt will be the import of 20 IT devices per consignment for research and development, testing, benchmarking and evaluation. Imports for repair and re-export, and for product development purposes, re-import of goods repaired abroad and devices coming as essential parts of capital goods will also be exempt from a licence requirement.

A senior executive with an IT hardware manufacturer said there was no point in panicking as imports were not banned but only put in restricted categories which necessitate an import licence. “The same was done for TVs around four years back and there were no supply chain disruptions. Now, due to that measure, around 90% of TV manufacturing is happening in India,” said the executive, requesting not to be identified. “Many TV components like mechanicals are being made locally.”

Queries sent to Apple, HP, Dell, Asus and Lenovo seeking a comment on the extension remained unanswered at press time.

The government has stressed that the move to impose restrictions on the import of IT hardware products is aimed at giving a fillip to the production-linked incentive (PLI) scheme and other Make-in-India initiatives, besides taking care of national security threats. So far, 44 companies have applied for the revised PLI scheme for IT hardware, the deadline for applying for which has been extended to August 31.

The authorities believe such non-tariff barriers to support domestic manufacturing are fully compliant with international trade norms. As per government officials, the time period of three months for the transition will help the industry put its house in order and prepare for the new regime.

“The deep desire to have a trusted and ethical supply chain will be beneficial to ethical brands and detrimental to the grey and refurbished products. We will see elimination of unethical players with this measure,” said Pankaj Mohindroo, chairman, India Cellular and Electronics Association. “The licensing to the ethical brands should be with a light touch and keeping brand and market dynamics in mind.”

ET had earlier reported that the licensing requirement against import of IT hardware was to guard against in-built security loopholes that might potentially endanger sensitive personal and enterprise data.

India’s electronics imports, including laptops, tablets and personal computers, stood at $19.7 billion in the April-June period, up 6.25% year-on-year. In 2022-23, imports of personal computers, including laptops, amounted to $5.33 billion.