Centre grants one year extension for select IT hardware import system

Govt to monitor local manufacturing under PLI before imposing any import curbs

The Directorate General of Foreign Trade (DGFT) on Wednesday extended the  import management system for select IT hardware products for another year. This comes at a time when domestic production in India is far lower than the demand.

 

The current import management system for the seven IT hardware products including laptop, tablet, all-in-one personal computer, ultra small form factor computer and servers, is valid till December 31, 2024. According to the latest DGFT notification, importers will have to seek fresh authorisation for next year.

 

A senior government official told Business Standard that there is no ‘drastic change’ in the new system but the government  will ‘closely monitor’ how much manufacturing is happening under the production-linked incentive (PLI) scheme for IT hardware. At least two new global majors are planning to begin manufacturing in India April 2025 onwards.

 

According to sources, the government would ‘observe’ if companies are committing to the proposed production targets under the PLI scheme, indicating that there could be import curbs later in the year if it is felt that any company is not complying with manufacturing targets. ‘’But, the government will ensure there’s no disruption,’’ a source said.

 

There's no visibility on the government’s policy stance after December 2025—the period till which the extension will be valid.

 

The window of application will be open from December 13. “Any authorisation issues for import of restricted IT hardware under IMS (import management system) shall be valid till 31 December, 2025. Importer is allowed to submit multiple applications in the year,” according to the notification.

 

The government had announced its plan in August 2023 to issue licences for import of select IT hardware products to reduce the country's dependence on China. However, due to resistance from the industry and key trade partners including the United States (US), India stepped down from its earlier plan and IMS was rolled out from November 2023--to issue import permits in an end-to-end online format.

 

How the government will authorise will be indicated in the import management system after monitoring the level of domestic manufacturing, it is learnt.

 

Industry officials said that while India has been facing immense pressure from the US to keep America as well as relevant stakeholders informed about New Delhi’s plan on the import monitoring system, the comeback of Donald Trump as the US President can make things complex for India. Hence, maintaining a status quo could be a prudent decision.

 

Ajay Sahai, director-general (DG) and chief executive officer (CEO), Federation of Indian Export Organisations (FIEO), said that the policy move is a step in the right direction. “The government is striking a balance between promoting manufacturing of domestic IT hardware and at the same time ensuring that the domestic demand is met through imports,” Sahai said.

 

During the financial year 2023-24, imports of the seven IT hardware products stood at $8.7 billion, with the share of China at about 60 per cent. In the case of personal computers, the share of Chinese imports hovered around 80 per cent.