Govt Imposes Curbs On Import Of Laptops, Tablets

Relevance: GS2 - Government policies and interventions; GS3 - Changes in industrial policy and their effects on industrial growth; Growth and Development

(Source: The Hindu, Indian Express, 08/04/2023)

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Why in the news?

• Recently, the Indian government has implemented immediate restrictions on the import of various electronic devices such as personal computers, laptops, and data processing machines.
• The imports of computers and other items under the seven categories of HSN Code 8471 were restricted and their import would be allowed against a valid licence for restricted imports.
• This move is intended to boost domestic manufacturing and aligns with the government's Production-Linked Incentive (PLI) scheme for IT hardware.

Key Highlights of Imports of Electronic Goods

• India has seen an increase in imports of electronic goods and laptops/computers in the last few years.
• During April-June 2023, the import of electronic goods increased to $6.96 billion from $4.73 billion in the year-ago period, with a share of 4-7 per cent in overall imports.
• Of the seven categories restricted for imports by India, the majority share of imports is from China.
• China accounts for roughly 70-80% of the share of India’s imports of personal computers, laptops.

Why have these restrictions been imposed?

• Boost domestic manufacturing: The recently imposed restrictions aim to boost domestic manufacturing of IT hardware through the production-linked incentive (PLI) scheme while also curbing the influx of these products from countries like China and Korea.
• Ensure security: It was stated that the main reason for these restrictions is to ensure the security of citizens. Certain hardware might pose security risks and could compromise sensitive and personal data. Therefore, these measures have been taken to address these potential security-related issues.
• The move is in line with the government's initiatives to boost manufacturing in India ‘Make In India’ programme. The curbs on import will give a boost to local manufacturers of electronic products such as laptops, computers, etc.

Impact of the move

• Impact on Industry Giants and Consumers: Companies like Apple, Samsung, and Acer could be affected by these restrictions, as they might need to increase local manufacturing and assembly to comply. Depending on licensing norms, consumer prices might rise due to potential supply disruptions.
• Impact on import data and China's Dominance: China holds a substantial share in the categories affected by these restrictions. In recent periods, China's imports in these categories were valued at millions.
  • Half of India's restricted goods come from China, but their relationship has deteriorated due to border clashes in 2020. This has prompted India to take anti-China measures, including limiting investment and trade from its neighbor.

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FAQs

MCQ

Question: Consider the following statements about Production Linked Incentives (PLI):

1. It aims to provide financial incentives to manufacturers who meet specific production targets.
2. The scheme is also applicable to the agriculture sector.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2