India to reduce laptop imports 5% annually from 2025, boost local output

India mulls 5% annual cut in import limits on laptops, tablets, and PCs from 2025 to boost domestic manufacturing under the Production-Linked Incentive (PLI) scheme, with free imports extended till De

In a bid to boost domestic manufacturing, the Indian government may introduce a 5 per cent annual reduction in import limits on laptops, tablets, and personal computers starting from 2025, reported Moneycontrol citing sources. The decision aims to gradually decrease reliance on imports and support the Production-Linked Incentive (PLI) scheme’s targets for local manufacturing.

 

For now, the Centre has extended the period for free imports of these items until December 31, 2024, deferring the original deadline set for September 30. Under the proposal, import limits would be reduced by 5 per cent annually, using data from the financial year 2024-25 as the base, paving the way for a phased transition towards increased local production.

 

However, the tech industry is awaiting further clarification and a formal notification from the government, expressing concerns about potential disruptions in a market valued at $10 billion. This policy shift could reshape India’s IT hardware sector, which has historically relied on imports, primarily from China and Hong Kong.

 

The proposal emerged during a consultation held in early November between government officials and representatives from major industry players, including IBM, Dell, Lenovo, and leading hardware associations. Industry members noted that they have been preparing for such a shift over the past year. To facilitate the transition, the government has promised an efficient, online system for managing imports, eliminating the need for manual customs procedures.

 

“This new system will be fully online, with no manual intervention, streamlining the import process at the customs level to provide a seamless experience for importers,” a government official told Moneycontrol.

 

The government views this policy as crucial not only for promoting domestic manufacturing but also for reducing security risks. “There is a significant security interest for the government, as about 70 per cent of these items are currently imported from China and Hong Kong,” the official added. By encouraging companies to move manufacturing to India, the government aims to reduce reliance on specific geographies.

 

A look back: India’s journey toward import regulation 

In August 2023, the government initially announced import restrictions on laptops, tablets, and PCs to boost local manufacturing. The policy faced pushback from global tech companies like Dell, Acer, Samsung, Panasonic, Apple, Lenovo, and HP, who argued that it could disrupt their supply chains. In response, the government delayed the restrictions, allowing free imports until September 2024.

 

Rather than enforcing a strict licensing regime, the government implemented an 'import management system' requiring IT hardware companies to register and submit import data. Initially set to end in September 2024, this system has now been extended until December 31, 2024.

 

According to a circular issued by the Directorate General of Foreign Trade (DGFT) on September 24, importers will need to apply for new authorisations starting January 1, 2025. Further instructions are expected from the DGFT on how the new authorisation process will operate, shaping the future landscape of India’s IT imports.