Import climbdown

Two months after hastily announcing a strict licensing regime for the import of laptops, tablets and other types of computers, the Union Government has introduced a potentially hassle-free import management system aimed at monitoring shipments of IT hardware. The announcement of the regime — citing security reasons and the need to promote domestic manufacturing — had caused ripples in the Indian IT industry, which is heavily dependent on imports, particularly from China. Rattled by the adverse reaction, the government had quickly deferred implementation of the licensing system to November; it has now done away with most of the curbs till September next year.

The industry has hailed this decision, saying that it is a step towards striking a balance between boosting domestic production and safeguarding consumer interests as well as integrating with global supply chains. It is laudable that the government wants to reduce red tape for the benefit of the stakeholders, but the climbdown is an admission that India has a long way to go to achieve self-reliance and become a globally competitive hub of electronics manufacturing.

India imported personal computers worth $5.33 billion in 2022-23 compared to $7.37 billion in 2021-22. China is well on top among the countries from where these goods are imported, followed by Singapore and Hong Kong. Considering the security concerns over Chinese products and the need to consistently bring down the import bill, the way forward is to promote domestic production. In May, the government had approved the production-linked incentive scheme 2.0 for IT hardware with a budgetary outlay of Rs 17,000 crore. The biggest challenge is to make products that meet international standards and are not overpriced. The government is hopeful that with an increase in domestic manufacturing, the overall supply will go up and the prices will either remain stable or come down. That would be a win-win situation for the consumer.