Government tweaks licensing norms for laptop, computer imports; puts in place online authorisation system

The government on Thursday tweaked curbs on imports of laptops and computers as it allowed importers to bring in shipments of IT hardware from overseas on a mere 'authorisation' upon detailing quantity and value.

The new 'import management system' is aimed at monitoring shipments of laptops, tablets and computers into the country without hurting market supply or creating a cumbersome licensing regime.

The announcement is likely to provide relief to companies in the IT hardware segment in India as they had flagged concerns over the imposition of a strict licensing regime for importers. Leading electronic brands that are sold in the market include HCL, Samsung, Dell, LG Electronics, Acer, Apple, Lenovo and HP.

Director General of Foreign Trade (DGFT) Santosh Kumar Saranagi told reporters here that the new licensing or import authorisation/management system, which will come into operation with immediate effect, is primarily aimed at monitoring imports of these products to ensure that they are coming from "trusted" sources.

While seeking the authorisation, an importer will have to provide an import item summary and details of past import, export, and turnover. Subject to certain conditions, the government will not reject any import requests and will use the data for monitoring the inbound shipments of these goods.

After taking into account the concerns of stakeholders of the sector, some "tweaking" in the policy has been made, and an end-to-end online system was launched for importers, Saranagi said.

Secretary of the Ministry of Electronics and Information Technology (MeiTY) S Krishnan said this system will "provide us with the kind of data and information (that) we need to make sure that we have a completely trusted digital system in this country".

On August 3, the government announced import curbs and then suddenly deferred the decision on August 4, stating that the licensing regime will kick in from November 1 following concerns raised by the industry.

An official said that the new online system is simple as compared to a cumbersome license regime.

The importers are allowed to apply for multiple authorisations and those authorisations would be valid up to September 30, 2024. The authorisations will be issued for any number of consignments for imports till September next year.

About post-September 2024 scenario, Krishnan said the government will study the data, interact with the industry, and then decide on ways to move forward.

"The intent is not to cause any kind of inconvenience or difficulty, impose any needless restriction on any of the players involved," the MeiTY secretary said, adding the goal is to promote manufacturing of more and more electronic hardware in the country.

Electronics will become the largest manufacturing sector not just in India but the whole world and India needs to have a significant presence in the sector and these measures will help in achieving that overall goal, he added.

"The idea is to give certainty for next year or so. We are just launching the system, studying it over a fairly extended period based on whatever data that we are able to get (and) based on the kind of interaction we have with stakeholders, further measures will be taken," the secretary said.

Sarangi said that with this import management system, the government will have clear data about specific products coming from different sources and then they can monitor it in consultation with the stakeholders.

The system, DGFT said, will ensure that it will be faceless and contactless, and there will be no hassles for importers to fill in their details.

The new license regime is applicable to laptops, personal computers (including tablet computers), microcomputers, large or mainframe computers, and certain data processing machines to ensure India's trusted supply chain.

He added that companies in the "denied entity list" will not get the authorisations.

Such a list includes firms which have not fulfilled or defaulted export obligations by availing benefits of schemes like advance authorisation and Export Promotion Capital Goods (EPCG) or having DRI (Directorate of Revenue Intelligence) cases against them.

Sarangi said that though an online system has been put in place, these IT hardware products are still "under the restricted" category and "there is no change in that".
When asked if the new system would lead to an increase in prices of these goods, Krishnan said that they do not expect supply to be constrained in any manner to push the prices up.

"Supply will continue both from domestic and imported sources and we believe, as domestic production (will increase), overall supply will increase and prices will either stay where they are or they will come down," he said.

The secretary also said that many applications have come under PLI and they are currently under appraisal and within one-two months, the process will be completed.

When asked whether the government will withdraw the August notification, the DGFT said it will not be withdrawn, and a clarification has been issued to give effect to the new online authorisation system for these imports.

The DGFT has provided several exemptions to different entities.

In a notification, it said these IT hardware products manufactured in Special Economic Zones (SEZs) can be imported into domestic tariff areas (outside SEZs) without any import authorisation on payment of applicable duties, if any.

Private companies importing these goods for supply to central and state government agencies or undertakings or for defence purposes are also exempted from seeking this permission for imports.
Besides, SEZ units, export-oriented units, Electronics Hardware Technology Park (EHTP), Software Technology Park, and Bio-Technology Park are not required to obtain a "restricted import authorisation" for the import of these IT hardware.

The restrictions are also not applicable to imports under baggage rules, and import of one laptop, tablet, personal computer or ultra-small form factor computer, including those purchased from e-commerce portals through post or courier, is also exempted.

After the issuance of an import authorisation, the quantity as mentioned on a valid authorisation may also be amended at any point, subject to the overall value of the import remaining unchanged.

In August, the government imposed import restrictions on laptops, computers (including tablet computers), microcomputers, large or mainframe computers, and certain data processing machines.

These five categories of goods will be covered under the import management system and the authorisation will be required for the purpose of custom clearance and will be issued in end to end online format.
India imported these goods worth USD 8.7 billion in 2022-23 against USD 10.3 billion in 2021-22 and USD 7.1 billion in 2020-21.

The country imported personal computers, including laptops, worth USD 5.33 billion in 2022-23 compared to USD 7.37 billion in 2021-22.

The main countries from where these goods were imported in the last fiscal include China (USD 5.11 billion), Singapore (USD 1.4 billion), Hong Kong (USD 807 million), the US (USD 344.7 million), Malaysia (USD 324.8 million), Taiwan (USD 272.5 million), the Netherlands (USD 132.8 million) and Vietnam (USD 126 million).

In May, the government approved the Production Linked Incentive (PLI) Scheme 2.0 for IT Hardware with a budgetary outlay of Rs 17,000 crore.

In February 2021, the scheme was approved for IT hardware, covering the production of laptops, tablets, All-in-One PCs and servers with an outlay of Rs 7,350 crore.