The Union MoS for Electronics and IT asserted, “This is not at all about license raj,” adding that the goals of the policy are to lessen reliance on imports and increase domestic production of this class of goods.
On August 4, Union Minister of State for Electronics and information technology Rajeev Chandrasekhar emphasized the necessity to develop a policy that limits the import of laptops and personal computers (PC) and stated that “there will be a transition period” for putting the new standards into practice.
A day after the Union Commerce Ministry informed via a notification that computer makers will henceforth require a valid license and pay duty to import PCs, laptops, tablets, servers, and so on, Chandrasekhar stated on Twitter that there will be a period of transition before this becomes effective and that it will be disclosed soon.
According to the announcement, the exemption will only be granted on the import license for up to 20 of these items per consignment for development and research, testing, benchmarking or evaluation, repair and re-export, and product development purposes.
The implementation of the limitations will be postponed by at least a month, according to a senior government official who spoke to news agency Reuters under the condition of anonymity.
To “reduce import dependence” and boost “domestic manufacturing of this category of products,” Chandrasekhar defended the policy, saying that the government’s goals are to make sure that “trusted hardware and systems” are employed in the Indian IT ecosystem.
The minister insisted that this was not at all about the license raj. His statement came shortly after news broke that major companies including Apple, Samsung Electronics, and HP Inc. were stopping new laptop and tablet imports to India in response to the restrictions.
According to official sources who talked with CNBC TV-18, importers will receive support, and items in transit would not be affected. According to those with knowledge of the situation, the Directorate General of Foreign Trade (DGFT) would make provisions for the rapid issue of licenses and specify the criteria for rejecting license applications.
They went on to say that it is doubtful that the government’s action will result in a price increase for this category of electronics.
However, according to experts who spoke with Moneycontrol, there might be short-term price increases even if the ‘Make in India’ program will benefit in the long run from the legislation.
Businesses may temporarily raise prices for some products, such as Apple, whose goods are totally imported. Neil Shah, a partner at Counterpoint Research, claims that since Dell and HP already have manufacturing operations here, this would be advantageous for them.
According to Navkendar Singh, Associate vice president, respectively, Devices Research at IDC, this shouldn’t surprise the industry or those who follow it because it was bound to happen eventually.
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He asserted that despite the government has long recommended the industry to start manufacturing in India, most of them are currently putting together a sizable quantity of computers here.
Of the 2 million computers that the nation exports each quarter, about 1.5 million are imported. Each high-end laptop is imported. Huge volumes are involved, and an imbalance between imports and exports exists. However, at this time, we cannot immediately increase manufacture, he stated.
