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Government

In a U-Turn After Backlash, Centre Mulls Lifting Curbs on Import of Personal Computers

The government had on August 3 banned imports of personal computers without a license with immediate effect, without considering that 80% of devices solid in India are imported. Due to severe backlash, the Centre now is said to be considering lifting restrictions placed earlier.

New Delhi: In a sharp U-turn, the Union government has said that it is considering launching a new registration system for the import of personal computers without any quota and licensing requirements, Business Standard reported.

The Union government on August 3 had issued a notification announcing a ban on the import of personal computers, laptops, and tablets without a license with immediate effect, to prevent Chinese imports from flooding Indian markets and to promote local manufacturing. The notification had put the import of these devices under a strict licensing regime.

The move by the government’s Directorate General of Foreign Trade (DGFT) had received a severe backlash, with traders expressing fear that it would result in an extreme shortfall in terms of the availability of computer products in the market, particularly with the festive season around the corner.

The apprehensions of traders are substantiated by the fact that 80% of laptops in the country are imported, with China contributing to the lion’s share. Only one-third of personal computer devices sold in India are assembled locally. Under pressure from traders, the government had extended the deadline for the ban, changing it from ‘immediate effect’ to October 31 this year.

“Import consignments can be cleared till October 31, 2023, without a license for restricted imports. For clearance of import consignments with effect from November 1, 2023, a valid license for restricted imports is required,” it had said, according to PTI.

However, traders still weren’t happy, essentially questioning the need for such a ban given that local manufacturing isn’t anywhere close to meeting the demand in the country. The latest news of instituting a new registration system, traders say, is nothing short of an effort by the government to “get out of a hole” that it has dug itself into, without factoring in the situation on the ground.

“The government has dug themselves a hole and now, they are trying to get out of it. They realised that there is nothing to be gained from setting the deadline in November. It isn’t viable for companies to shift their manufacturing units to India on such short notice. Unless they give at least a year’s time, it is not going to be possible for companies to start manufacturing here,” Business Standard quoted an original equipment manufacturer (OEM) as saying. In business parlance, an OEM means a company that makes a product to be sold by another company under its own name. For instance, an OEM computer manufacturer might make computers for a brand like Dell or Lenovo, who then sell the products under their own brand names.

With the latest news, there is a huge sigh of relief on the part of OEMs like Apple, HP, Dell, and Lenovo, who have been busy ramping up their imports in view of the forthcoming festive season when sales are expected to see a huge spike. The possible change in the rules would also mean that there would not be any shortfall in the supply. However, there is also a feeling among traders that, despite the changed norms, the chaos and an atmosphere of uncertainty engendered by the government could result in a price rise.

“Imports have been going smoothly for now, and continue to remain so if new registration is put in place. The move has given us some breathing space. However, there is still a lot of uncertainty. Conversation about this is still ongoing and there hasn’t been any official word from the government on when it is going to be implemented,” a PC manufacturer told the newspaper.

According to officials, the government would only monitor the source and value of devices as part of an import management system for the current financial year. The quota and other compliance requirements would come into play only in the next financial year, they added.

“It is in the interest of the consumer that such an allowance has been made. Otherwise, companies would have resorted to hoarding and selling devices at exorbitant prices. People would also be getting older devices, which would be sold to them at a premium,” said Faisal Kawoosa, founder and chief analyst at Techarc, a market research firm.