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Sudden! India is "forcing" computer manufacturers to move in! Require an import license!
Aug 16,2023
Recently, the Indian government suddenly issued an announcement stating that to restrict the import of personal computers, including laptops and tablets, companies need to apply for a license in advance to be exempted, and the restriction order will take effect immediately.
Perhaps it was also aware that the "one size fits all" cut too fast. The next day, India's General Administration of Foreign Trade (DGFT) changed its statement, saying that it would give enterprises a three-month grace period, and the import restriction order would take effect on November 1.
Keep an eye on the computer industry
This is the latest in a series of initiatives by the Indian government to encourage the localization of electronic products. Data show that from April to June, India's imports of electronic products including laptops, tablets and personal computers were US $19.7 billion, an increase of 6.25 percent year-on-year.
The Indian government did not explain the reasons for the new regulations in the restriction order, but Chandraseka, Minister of State for Electronics and Information Technology of India, said that India is becoming one of the fastest-growing electronics markets in the world.
The purpose of the new measures is to "ensure access to trustworthy computer hardware and systems" and reduce dependence on imported products.
At present, India's three-month grace period for computer manufacturers is not a show of mercy, but to a large extent to prevent the supply of personal computers in the Indian market from being cut off in the short term.
After the restraining order was issued, due to policy uncertainty, personal computer giants such as Apple, Samsung and Hewlett-Packard suspended the export of personal computers to India.
In fact, the Modi government proposed "Made in India" in 2014 and "Self-reliance" in 2020, constantly emphasizing local manufacturing. Major PC manufacturers have been making some preparations to reduce import dependence and promote local production.
Previously, India used tariff leverage to gradually force foreign mobile phone companies to settle in India. Personal computer manufacturers previously thought that the Indian government would take such a gradual route in the future.
No, the Indian government did not go the usual way this time and issued a restraining order without warning.
Industry insiders said that based on India's administrative efficiency estimates, various computer products will have to wait a long time to return to the Indian market, and due to the existence of a licensing system, the launch of new products in the Indian market may be much later than the international market.
Especially with the start of school in autumn and the upcoming Diwali shopping season in October, consumers' demand for personal computers is expected to rise sharply. These considerations may eventually prompt the Indian government to postpone the restriction order for three months.
In addition, India's policy this time has been subdivided. It has also implemented import exemptions for computers used as productivity tools. Computers used for scientific research and computers used for personal consumption have been distinguished to prevent accidental damage to India's productivity.
Currently, there are no well-known personal computer manufacturers in India, and global brands such as HP and Dell currently conduct limited assembly in India.
In the first half of this year, India's notebook computer market share ranked the top five, namely HP, Dell, Lenovo, Acer and Asus; the top five tablet computers were Samsung, Apple, Lenovo, Realme and Acer.
80% of laptops sold in India are imported from China, and about 2/3 of tablets come from China.
Step up the industrial layout
In March 2020, India launched the "Production Linked Incentive Scheme" to create an Indian mobile phone manufacturing center. The first phase focused on mobile phone manufacturing, electronic components and manufacturing. By November 2022, the Production Linked Incentive Scheme has been rolled out to 14 major manufacturing sectors in India.
In 2021, India launched a production-linked incentive program worth about $0.9 billion to encourage computer products such as laptops and tablets to be produced in India, hoping that global computer giants will bring advanced manufacturing technology to India.
In May this year, the Indian government announced that it would more than double the subsidy scale of this production-linked incentive program to $2 billion.
The government said the incentive scheme was key to India becoming a "global electronics manufacturing hub" with a target of $300 billion billion in gross output by 2026.
However, contrary to our wishes, the number of enterprises attracted this time is still limited and the effect is not good. The Indian government has to extend the deadline for application to August 30.
The Indian government may be urging foreign companies to apply to join the program.
At the same time, Indian brands are eager to grab the local market. Reliance Group subsidiary Jio released a new cheap notebook Jio Book, which Amazon priced at 16499 rupees (about 1433.6 yuan).
But even for Indian brands, many accessories in notebooks are produced and provided by Chinese companies. Now under the license system, it may further increase the cost and difficulty of production, and it is more likely to accidentally hurt local companies in India.
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