India (Common Wealth) _Regulators stunned the world’s largest PC producers on Thursday by making permits required for the import of devices ranging from small tablets to all-in-one PCs without a license.
Apple Inc., Samsung Electronics Co., and HP Inc. are among the major companies that have suspended new laptop and tablet imports to India after the country abruptly barred unlicensed shipments.
The Indian government slapped immediate limits on the import of laptops, tablets, all-in-one personal computers, ultra-small PCs, and servers on Thursday. Any company wishing to sell laptops or computers in India will now be required to obtain government approval for their inbound shipments.
According to the Directorate General of Foreign Trade (DGFT), up to 20 products per consignment are excluded from import licensing for R&D, testing, benchmarking and evaluation, repair and return, and product development reasons.
The change is intended to encourage domestic production of these products through a recently relaunched production-linked incentive (PLI) scheme for IT gear. The deadline for submitting an application for the so-called production-linked incentives in this product category is August 30.
The action is also designed to reduce imports of these goods from nations such as China and South Korea, and to boost local manufacturing of all computer-related products. Laptop manufacturers had been anticipating for government action, but the unexpected license demand caught them off surprise.
Regulators startled the world’s largest PC makers by making permits required for the import of gadgets ranging from small tablets to all-in-one PCs. According to people familiar with the topic, who declined to be identified due to the sensitivity of the issue, laptop manufacturers were prepared for some government steps aimed at reducing reliance on imports and increasing domestic manufacturing, but the abrupt license imposition caught the industry off guard.
IT companies are already negotiating with New Delhi on how to secure licenses as swiftly as possible, as India’s Diwali shopping season and back-to-school time approach. It’s unknown how long it will take Apple and others to obtain permits. However, the embargo has already disrupted a multibillion-dollar trade in foreign PCs at a critical juncture.
Requests for response from India’s trade ministry, Apple, Samsung, and HP were not immediately returned. The need adds to the woes of manufacturers who are already dealing with a global excess of inventory and few triggers to reignite sales growth. It might lead to delayed India launches or possibly product shortages in a market that is still heavily reliant on outside supply.
The import ban, another example of India’s abrupt policy adjustments, adds to long-standing barriers aimed to discourage the entry of foreign electronics. It is meant to help accomplish long-term goals of creating a world-class tech manufacturing industry.
The administration of Prime Minister Narendra Modi is presently accepting applications for a 170 billion-rupee ($2.1 billion) financial incentive scheme to attract manufacturers of laptops, tablets, and other hardware to the world’s most populous nation, as corporations seek to diversify supply chains outside China.
According to the sources, companies are now negotiating with the government on how to obtain licenses fast in front of the upcoming festival season. It is unclear how long it will take for the companies to obtain permits, but the stop is already causing havoc in the multibillion-dollar trade in foreign PCs.
These regulations may provide further challenges for manufacturers already dealing with worldwide surplus inventory and triggers to resume sales growth. This could result in product delays or shortages.
This might also result in delayed product launches or even product shortages in India, which is still heavily reliant on imports from abroad, according to the article.
The Indian government is currently accepting proposals for an INR 170 billion financial incentive scheme to recruit laptop, tablet, and other hardware makers as corporations begin to look outside China for supply chain needs.
