India has abruptly restricted the import of personal computers including laptops and tablets as the country works to boost local electronics manufacturing.
In a notice issued on Thursday, the commerce ministry’s directorate general of foreign trade said companies would with immediate effect need a “restricted imports” licence to ship such devices into India. Analysts said the new rule would create a barrier that could slow the flow of imports.
The directorate gave no reason for the sharp policy shift or say what it expected its impact to be, but India is trying to grow its electronics industry amid a shift away from manufacturing in China.
“Today’s policy announcement is aimed at accelerating the ‘Make in India’ initiative,” said Prabhu Ram, head of industry intelligence at Indian consulting firm CyberMedia Research, referring to Prime Minister Narendra Modi’s flagship policy on domestic manufacturing.
New Delhi in May launched a Rs170bn ($2.1bn) incentive scheme for IT hardware manufacturing that is designed to encourage companies to set up factories in India.
“If the production-linked incentive schemes are a treat for companies that manufacture in India, the new import restrictions are the obstacle course [for those that do not],” said Ashutosh Sharma, head of Forrester Research India, a consultancy.
Shares in local electronics companies jumped on news of the import licences. Dixon Technologies, which in 2021 partnered with Taiwanese hardware maker Acer to make laptops in India, gained 8 per cent on Thursday.
But the new import restrictions could hit companies such as Apple, which has a 14 per cent share of India’s laptop market, according to analysis firm Canalys. Apple assembles iPhones in India as part of its effort to reduce reliance on China, but imports all its laptops and iPad tablets. Apple did not respond to a request for comment.
India imported $1.5bn worth of personal computers between January and May this year, official trade statistics show, down from $2.7bn during the same period the previous year.
Indian companies are starting to make their own laptops. Billionaire tycoon Mukesh Ambani’s digital unit Reliance Jio launched a new laptop model on Monday, priced at Rs16,499. Jio’s first laptop came out late last year. Primebook, a start-up based in New Delhi, is producing in India a laptop aimed at students.
Many multinational computer companies already make laptops in India. HP, which commands 23 per cent of India’s market share according to Canalys, announced in 2021 it would make laptops in the southern Indian state of Tamil Nadu. Dell and Lenovo also manufacture in India.
But others such as Asus and Samsung produce all their laptops in other Asian countries such as China and Vietnam.
Some analysts warned that India’s import restrictions could shake the computer market over the next few months, a period of religious festivals that is usually a busy sales time.
“Laptops in inventory will likely see a hike in price due to product scarcity,” said Ashweej Aithal, analyst at Canalys. “Apple and Asus might find it tough getting a PC import licence, unlike others already manufacturing locally.”
Source: Economy - ft.com
