IT hardware import curbs: Government may push deadline by a year as laptop makers seek time to find 'trusted sources'

The government on Friday (September 22) has assured IT hardware industry stakeholders that it will consider pushing back the deadline for import restrictions by a year, till November 2024, provided certain conditions are met. Last month, the government had set an October 31 deadline to implement the import restrictions on laptops, tablets, and personal computers.

Sources told CNBC-TV18 that the government, in a meeting with industry stakeholders, has also proposed a middle ground, allowing unrestricted imports against registration and disclosure of import details. Any restrictions, if introduced, could be done in a staggered manner, sources said. This also allows laptop manufacturers a year or more — as was their request — to find trusted import sources, rejig their supply chains and properly implement the Impot Management System, as well as establish indigenous manufacturing facilities to dampen the blow before the restrictions kick in.

The government has already clarified that these are not blanket curbs on imports, but rather, restrictions on the sources from which companies import components to manufacture these devices. Essentially, the government wants original equipment manufacturers (OEMs) to source their hardware from trusted sources for security reasons, as well as promoting domestic manufacturing.

This can be seen as an attempt by the government to reduce the reliance on China, which is a major exporter of electronics and IT hardware components. In addition to laptops, personal computers, and servers, the directive has the potential to encompass a wide variety of finalised IT hardware devices, including 5G sensors, which are primarily sourced from China.

Chinese giant Huawei, which, apart from consumer electronics, also manufacturers network hardware, was recently found shipping Chinese-made chips for surveillance cameras, circumventing US export controls. In 2019, the Donald Trump administration had blacklisted Huawei over concerns that China could be using its equipment to spy on the US.

According to the most recent data released by the Ministry of Commerce and Industry, India witnessed a substantial increase in laptop imports during the first nine months of 2022, totaling $5.24 billion. A significant majority of these imports, approximately 75 percent, originated from China.

Furthermore, in the initial nine months of 2022, India's laptop imports from just China reached approximately $3.82 billion, accounting for 72.9 percent of the nation's total laptop imports for the year. This figure represents a 9% percent increase compared to the $3.5 billion worth of laptop imports from China during the equivalent period in 2021.

On August 3, the Ministry of Commerce issued an notification restricting the import of "laptops, tablets, and certain types of computers with immediate effect", sending ripples of concern through the industry. A day later, the government relaxed the deadline to October 31, giving the industry a breather.

Government officials subsequently held meetings with stakeholders in which they assured the latter that these were not "import curbs", but an "import management system".