India plans to restrict tech imports to boost domestic production
India is gearing up to restrict the import of laptops, tablets, and PCs from next year. The move comes as part of a larger government plan to push tech giants such as Apple to increase their manufacturing in the country. The move could have a major impact on an industry worth between $8 billion and $10 billion, reshaping India's IT hardware market, which is heavily dependent on imports.
Previous import restriction plan faced backlash
Last year, a similar plan to limit imports was scrapped due to resistance from companies and lobbying efforts by the US. Since then, India has been monitoring imports under a system set to end this year. The government has requested firms to apply for new import approvals for next year, indicating that it believes the industry has had sufficient time to adjust.
Consultations and new import authorization system
The Indian government intends to start talks with all stakeholders next week on this. If required, the implementation of import restrictions could be delayed by a few months. The Ministry of Electronics and Information Technology (MeitY) is also working on a new import authorization system, under which companies will have to seek prior approvals for their imports.
India's IT hardware market and import dominance
India's IT hardware market, including laptops, is worth nearly $20 billion. However, domestic production only accounts for $5 billion of this total. Major players like HP, Dell, Apple, Lenovo, and Samsung dominate the industry with imports fulfilling two-thirds of Indian demand. A major chunk of these imports come from China. The government is also considering minimum quality standards under its 'compulsory registration order' for laptops, tablets to weed out substandard devices.
Import restrictions could benefit domestic manufacturers
The proposed import restrictions could also help domestic manufacturers like Dixon Technologies, which has collaborated with global firms like HP to manufacture laptops and computers in India. Dixon hopes to fulfill 15% of India's total demand. An industry source, who was part of the government's consultations, told Moneycontrol that any curbs on imports should be weighed against India's domestic production capacity.
Global firms join India's production incentive scheme
India's flagship production-linked incentive scheme for IT hardware has lured global giants. Most of the approved players are set to start manufacturing. The Indian government has set aside nearly $2.01 billion in federal subsidies to boost domestic production. According to Counterpoint, imports of fully assembled laptops from abroad fell by 4% in the first five months of 2024 over the previous year, with firms like Lenovo and Acer increasing local assembly for entry-level laptop models.
