In a remarkable policy shift, India announced a new licensing requirement for the importation of laptops, tablets, and personal computers effective immediately. The implementation of this policy could deeply affect major global tech giants such as Apple, Dell, and Samsung, potentially pushing them to ramp up local production.
Prior to this change, India’s regulations permitted companies to import laptops freely. However, the new decree mandates a special license for these goods, echoing the restrictions India enforced for incoming TV shipments in 2020.
Industry insiders argue that this licensing system could lead to extended wait times for each new model introduced to the market. Furthermore, the timing of this regulation, coming on the eve of India’s festive season when sales typically skyrocket, could strain these companies significantly.
The government notification did not offer a specific reason for this sudden move. Nevertheless, it’s no secret that Prime Minister Narendra Modi’s administration has been vigorously advocating local manufacturing and reducing imports under the auspices of the “Make in India” initiative.
Government data reveals that from April to June, India’s electronics imports, encompassing laptops, tablets, and personal computers, amounted to $19.7 billion, marking a 6.25 percent increase year-on-year. Notably, these devices account for approximately 1.5 percent of India’s total annual imports, with nearly half of these originating from China.
Apple’s iPads and Dell’s laptops are amongst the multitude of electronics that are imported into the country, as opposed to being manufactured locally. Economist Madhavi Arora of Emkay Global believes the intent behind the new rule is the “substitution of certain goods that are imported heavily.”
Though Apple, Dell, and Samsung refrained from immediately commenting on this development, it could potentially influence their standing as key players in India’s laptop market, alongside Acer, LG Electronics, Lenovo, and HP Inc. Meanwhile, the policy is forecasted to advantage contract manufacturers like Dixon Technologies, as evidenced by a more than 7% surge in their shares following the news.
Ali Akhtar Jafri, former director general at electronics industry body MAIT, stated, “The move’s spirit is to push manufacturing to India. It’s not a nudge, it’s a push.”
Simultaneously, India’s government has extended the deadline for companies to apply for a $2 billion incentive scheme, intended to lure large-scale investments in IT hardware manufacturing. This incentive encompasses products like laptops, tablets, personal computers, and servers.
With ambitious targets of $300 billion annual production by 2026, the incentive is pivotal to India’s ambitions of becoming a linchpin in the global electronics supply chain. The country has imposed high tariffs in the past on products like mobile phones to stimulate domestic output.
This news is based on a Reuters.com article.
