Import Restrictions on India’s Laptop & Computer Market

India imposed certain import restrictions on laptops, computers and tablets in August 2023. The restrictions were, however, repealed by the Government, and these have now been scheduled to be applicable from October 2023.

This move was allegedly made due to certain security concerns and aims to encourage increased domestic manufacturing of such items and boost production of such items in the country.

While these restrictions will majorly impact imports from China and Korea, importers of such items can get a license and authorization from the Government to import their products.

Notification

The Government of India notified details of such restrictions on imports through the Directorate General of Foreign Trade (DGFT) notification dated 3 August 2023. This notification basically made certain amendments to the Import Policy of Items under HSN 8471 of Chapter 84 of Schedule-I (Import Policy) of ITC (HS), 2022.

HSN stands for ‘Harmonized System of Nomenclature,’ which means a uniform code under which items are taxed for GST purposes. ITC (HS) stands for Indian Trade Certificate based on Harmonized Systems.

This notification states that importing laptops, tablets, all-in-one personal computers, and ultra small form factor computers and services that fall under HSN 8741 shall be ‘restricted’ without a valid restricted imports license. After the restrictions are imposed, these items shall only be imported upon obtaining a valid license for restricted imports from the relevant authorities.

The restrictions were repealed and the date when they shall come into effect was postponed to 1 November 2023.

HSN Covered

HSN	Item Description
84713010	Personal computer.
84713090	Other (Automatic Data Processing Machines and units thereof; Magnetic or Optical Readers, Machines for Transcribing Data on to Data Media in Coded Form and Machines for Processing such data, Not Elsewhere Specified or Included-Portable Automatic Data Processing).
84714110	Micro computer.
84714120	Large or main frame computer.
84714190	Other (Automatic Data Processing Machines and units thereof; Magnetic or Optical Readers, Machines for Transcribing Data on to Data Media in Coded Form and Machines for Processing Such Data, Not Elsewhere Specified or Included - Other Digital Automatic Data Processing).
84714900	Other automatic data processing machines.
84715000	Processing units other than those of sub-headings 8471.41 or 8471.49, whether or not containing in the same housing one or two of the following types of units: storage units, input units, output units.

Aim of Import Restrictions

• Boost domestic manufacturing to fill the gap by offering production-linked incentives (PLI) in over two dozen sectors.
• Reduce dependence on imports.
• Reduce items imported due to security concerns.
• Commitment to the Information Technology Agreement of 1997.
• The Government of India has extended the deadline to submit an application to receive INR 17,000 crores for IT hardware.

How to Apply for Restricted Imports License?

• Visit the DGFT portal - https://www.dgft.gov.in/CP/
• Login with valid credentials.
• Go to ‘Services’ and choose ‘Import Management Systems’.
• Select ‘Restricted Imports’.
• Select ‘Apply for Revalidation of Restricted Imports Authorization’.
• Submit the required details and upload mandatory documents.
• After all the documents have been uploaded, submit the application.
• After successful submission of the application, the Restricted Import License shall be issued by DGFT Delhi.
• Several restricted products can be imported under a single Restricted Imports License.
• Export products can now be uploaded in bulk using the ‘Bulk Upload’ function.

Disadvantages

• Potential for increase in prices due to the Government’s mandate to obtain a license by paying a certain fee.
• Reduced profits for tech companies, who shall drop prices to remain in the competitive Indian market.
• Disruption in offers and discounts during festival season.

Exempted Imports

• The restrictions shall not be applicable to individuals who have the mentioned items in their bags.
• One laptop, tablet, all-in-one personal computer, or ultra-small form factor computer, including those purchased from e-commerce portals, through post or courier. However, these will be subject to payment of applicable customs duty.
• For R&D, testing, benchmarking, and evaluation purposes, repair and re-export, and product development purposes, up to 20 such items per consignment are exempt from import licensing.
• Items forming a crucial part of capital goods are exempted.
• If the restricted items have been repaired abroad and are being brought back in India, the same shall be exempted.

Conclusion

The Government of India has constantly made efforts and laws that encourage manufacturers to boost production in India and reduce dependency on imported items as much as possible. As such, importers must timely apply for a license for restricted imports to avoid any potential harm to their business, i.e., they must file an application to obtain a license prior to 1 November 2023.