Why did India ban import of laptops?

The government on Thursday restricted the import of laptops, tablets and computers with immediate effect for security reasons and to promote domestic manufacturing. Laptops and tablets account for a fraction of India’s annual import of electronics of more than $60 billion.

The ban of import of Laptops, tablets and computers will add another layer of incentive for local manufacturing to the existing incentives worth $2 billion assured under the Productivity-Linked Incentive (PLI) scheme. India is targeting annual production worth $300 billion by 2026 and the restrictions on unlimited imports will compel companies like Dell, Acer, Samsung, LG Electronics, Apple, Lenovo and HP to enhance their assembling or manufacturing facilities in India.

Purchasers need to seek permission to import laptops, tablets, all-in-one personal computers and ultra-small computers and servers with immediate effect, according to a notification from the Directorate General of Foreign Trade. Certain types of PCs that are designated as “capital goods” may be exempt, the agency said without elaborating.

Immediate implementation of the licensing requirement for imported electronics could disrupt the PC market, industry warns. The move will also curtail inbound shipments of these goods from countries like China and Korea.

PC companies warn that this sudden requirement could halt PC imports — which account for 90% of all sales in the country — prompting a significant shortage in the market and a sharp increase in prices. India's laptop and personal computer market is going to be worth $8 billion annually, with two third of those imported.

There are MNC’s into Computing manufacturing in India including Dell, HP , Lenovo and Acer will have certain advantages. India imports the majority of its laptops and tablets from China. However, this move could hit hard the likes of Apple, Microsoft Surface, Dell, Samsung, Lenovo, HP and Panasonic and force them to boost local manufacturing.

As per the report, around 30–35% of laptops and 30% of tablets shipped to India during the first half of 2023 were manufactured locally. Industry executives said a licensing regime would mean prolonged wait times for each new model they launch, and would come just ahead of a festive season in India when sales typically surge.

A source said, there are most of the Make in India brands, who meet the price competitive market by importing mostly from China, Taiwan and Korea. At the same time, it is a boost to the Make in India companies including recently launched JioBook.

As most of the big brands are having manufacturing in India except premium model. They have to take import license or setup manufacturing for these models in India. With these regulations many refurbished laptops which were coming to India will have a definite dent to this business and this will further boost Indian manufactures.

S Mohini Ratna, Editor, VARINDIA