India limits imports of laptops, computers to push local manufacturing

India has restricted imports of laptops, tablets and personal computers with immediate effect, according to a government notice on Thursday, in a bid to push local manufacturing. "Their import would be allowed against a valid licence for restricted imports," the notice said. In April-June, electronics imports, which include laptops, tablets and personal computers, was $19.7 billion, up 6.25% year-on-year.

Electronics imports range between 7% to 10% of the country's total merchandise imports. "The move's spirit is to push manufacturing to India. It's not a nudge, it's a push," said Ali Akhtar Jafri, former director general at electronics industry body MAIT. India has been trying to push local manufacturing by giving production-linked incentives in over two dozen sectors, including electronics.

It has extended the deadline for companies to apply for its $2 billion manufacturing incentive scheme to attract big-ticket investments in IT hardware manufacturing, which covers products like laptops, tablets, personal computers and servers. The incentive scheme is key to India's ambitions to become a powerhouse in the global electronics supply chain, with the country targeting annual production worth $300 billion by 2026. Dell, Acer, Samsung, LG Electronics, Apple Inc, Lenovo and HP Inc are some of the key companies selling laptops in the Indian market and a substantial portion are imported from countries such as China.

Shares of Indian electronic maker Dixon Technologies rose over 5% on the news. The intent seems to be "import substitution of certain goods that are imported heavily," said Madhavi Arora, economist at Emkay Global. Laptops, tablets and personal computers compose about 1.5% of the country's total annual imports and nearly half of those are bought from China, according to government data.

India has imposed high tariffs in the past on products like mobile phones to catalyse domestic output. Last year, it produced $38 billion worth mobile phones in the country, while local production of laptops and tablets were just $4 billion in comparison, according to estimates from industry body India Cellular and Electronics Association.

Reuters