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India's Government Clamps Down on Laptop, Tablet, and Server Imports

Amid efforts to boost domestic production, the Indian government tightens rules on importing laptops, tablets, and servers, potentially impacting the operations of global tech giants such as Apple and Dell.

India's government has swiftly imposed constraints on the importation of laptops, tablets, and personal computers, which fall under the HSN 8741 category.

Policy Changes and Exemptions

In a newly issued notification (1), the Directorate General of Foreign Trade (DGFT) stated that a maximum of 20 items per consignment would be exempt from import licensing. These items can be imported solely for purposes of R&D, testing, benchmarking, evaluation, product development, and repair and return.

The directive further clarified, “An exemption from import licensing requirements is in place for the import of 1 laptop, tablet, all-in-one personal computer, or ultra-small form factor computer, inclusive of those bought from e-commerce portals, shipped through post or courier. However, all imports are subject to duty payment as per regulations.”

The restrictions are not applicable to imports under Baggage Rules. The DGFT notification further laid out conditions stating, "the imported goods must solely be used for the stated purposes and are not allowed to be sold. Post usage for the stated purposes, the products should either be rendered unusable through destruction or re-exported."

Impact on Market Players and 'Make in India' Drive

India's laptop and PC market is predominantly led by key international players including Dell, Acer, Samsung, Panasonic, Apple, Lenovo, and HP. According to an International Data Corporation report, despite a severe YoY decline of 28.5% in Q4 2022 (Oct-Dec), the traditional Indian PC market - comprising desktops, notebooks, and workstations - saw a modest growth of 0.3% YoY in 2022, reaching 14.9 million units.

These new regulations align with the Indian government's initiative to enhance the 'Make in India' movement. Yet, this may be a setback for corporations like Apple and Dell, compelling them to shift laptop manufacturing to India. While Apple has initiated iPhone production in India, it does not yet manufacture its laptops domestically.

Earlier in the year, the Indian government announced a $2 billion production-linked incentive (PLI) scheme aimed at fostering local manufacturing of laptops, PCs, servers, and related-edge computing equipment, including personal computers and servers.

Notably, Reliance Jio recently launched its JioBook in India, further illustrating the shift towards local production.