New regulations require import licences with immediate effect; will hit short-term availability of Dell, HP, Lenovo, Apple laptops; boost for domestic laptop assembly firms; unclear impact on ITeS sector
The Central government on Thursday restricted all imports of laptops, tablets, all-in-one and small-factor personal computers or PCs, requiring licences for these products to be brought into the country and sold to consumers. The move is expected to particularly impact short-term laptop availability from laptop brands that rely on assembly abroad, such as Dell, HP, Lenovo and Apple.
The notification may entail longer wait times for individual products to be cleared for import and sale in India. “The said Restriction shall not be applicable to imports under Baggage Rules,” the Directorate General of Foreign Trade said in its notification announcing the curbs, indicating that travellers may be free to bring one of these products back with them from overseas without attracting penalties.
An expensive prospect
Laptops can still be purchased online from overseas, the government clarified; however, when these are imported by individual buyers, the import duty and shipping fees may make this an expensive prospect, as tax may also have to be paid in the country from where the laptop is purchased. Devices imported for research and development, and those repaired abroad, are exempt from these restrictions.
Electronics such as laptops are generally sold at lower rates than the maximum retail price (MRP), which allows manufacturers to hike prices on short notice when needed.
Boost for domestic firms
When contacted, Dell, HP, and Lenovo declined to comment on the government’s move, with one of the affected players saying it was studying the notification.
However, the move lifted the spirits of domestic laptop assembly firms. “We currently hold the PLI for IT hardware and are manufacturing laptops for notable brands,” A. Gururaj, managing director of Optiemus Electronics said in a statement, referring to the government’s performance-linked incentive (PLI) scheme for assembling laptops and PCs domestically. “With this move, we expect further expansion of our capacity to manufacture these devices,” he added.
“With PLI… being announced for this sector, domestic manufacturing of these IT hardware goods should witness a significant boost,” Abhishek Jain, partner and national head of indirect tax at KPMG said.
Critical for the services sector
PricewaterhouseCoopers recommended that the government clarify its interpretation for imports by firms who buy these products as part of their capital expenditure. “The clarity is essential especially since these are capital goods critical for the service industry or ITeS sector,” the firm said in a note.
In 2022-23, India imported $10 billion worth of ‘automatic data processing machines and units,’ the category under which all these products fall, according to data from the Department of Commerce’s Export Import Data Bank. This was 13.27% lower than the number of imports in the previous year.
A representative of a firm that deals in high-end PCs from prominent brands — largely imported — said that they have been asking retailers for ‘stock reports’ in the hours since the restrictions were notified, referring to the inventories of laptops that have already been imported into India, and are yet to be sold by stores.
