Why US has a 'problem' with India’s licence mandate ?

The US has raised concerns over India’s license mandate for laptop and tablet imports. The reaction comes after the announcement, Import consignments can be cleared till 31 October without a license for restricted imports. For clearance of import consignments with effect from 1st Nov’ 2023, a valid License for Restricted imports is required according to the Directorate General of Foreign Trade, Government of India. The scheme aims to boost manufacturing of laptops, tablets, personal computers, servers and edge computing devices in the country.

US trade chief Katherine Tai has raised concerns with India over the Asian nation’s new order mandating licenses for the import of laptops, tablets and personal computers. Tai’s intervention comes amid worries the licensing regime could impact shipments from the likes of Apple and Dell and force firms to boost local manufacturing.

As per the source, there are 58 plus leading global and domestic players have evinced interest in the new production linked incentive, or PLI, scheme for IT hardware, said Alkesh Sharma, secretary, ministry of electronics and information technology. Most of them were registered global and Indian players.

India’s new licensing regime, which is due to come into effect on November 1st , aims to “ensure trusted hardware and systems” enter the nation. It also seeks to reduce dependence on imports, boost local manufacturing, and in part address the country’s trade imbalance with China.

As per the source, the government, however, has no plans of extending the month-end deadline for applications, Sharma said, noting that interested players have another couple of days to submit the documents, the next step after registrations. The ministry will begin scrutiny of the applications after the deadline ends.

The government did not give any explanation on why it is imposing curbs on import of laptops, All-In-Ones and tablets, officials said that it has been done to "safeguard the security of citizens" and added that imports will be allowed only from "trusted sources". Some of the hardware can potentially have security-related issues and compromise sensitive and personal data.

It is to be noted that the government's PLI scheme for hardware failed to find any takers despite the incentive amount being increased by 131% to Rs 17,000 crore. The new rule is aimed at shifting focus from importing to Making in India and it is expected to generate the direct employment of 75,000.

S Mohini Ratna, Editor, VARINDIA