India is expected to impose restrictions on the import of laptops, tablets, and personal computers starting in January, according to two government sources familiar with the discussions. This move aims to encourage companies like Apple to ramp up domestic manufacturing. If enacted, the restrictions could significantly disrupt an industry valued between $8 billion and $10 billion and alter the current dynamics of India’s IT hardware market, which relies heavily on imports.
Last year, a similar plan to restrict imports was withdrawn following backlash from companies and lobbying from the United States. Since then, India has been monitoring imports under a system set to expire this year, requiring firms to seek new approvals for imports in the upcoming year. Sources indicate that the government believes it has provided sufficient time for the industry to adapt.
Consultations with various stakeholders are set to begin next week, and there is a possibility of delaying the implementation of the import restrictions by a few months if necessary. The Ministry of Electronics and Information Technology (MeitY) is developing a new import authorization system that will require companies to obtain prior approvals for their imports, shifting from the current regime that allows laptop importers to bring in devices after automated online registration.
The IT hardware market in India, dominated by major players like HP, Dell, Apple, Lenovo, and Samsung, is significantly reliant on imports, with approximately two-thirds of Indian demand currently met through these imports, a considerable portion of which comes from China. The overall market for IT hardware, including laptops, is estimated to be nearly $20 billion, with about $5 billion attributed to domestic production, according to consultancy Mordor Intelligence.
The government is also considering establishing minimum quality standards for laptops, notebooks, and tablets under its ‘compulsory registration order’ to eliminate low-quality devices. One official noted that global treaties prevent tariff actions on laptops and tablets, leaving the government with limited policy options to restrict imports.
This initiative could benefit contract manufacturers like Dixon Technologies, which have agreements with global companies like HP to produce laptops and computers in India. Dixon aims to capture 15 percent of the country’s total demand.
The government’s approach to limiting imports should align with India’s domestic production capacity, as suggested by an industry source involved in consultations. The nation’s production incentive scheme for IT hardware has attracted participation from global companies, with many approved participants poised to begin manufacturing. India has allocated nearly $2.01 billion to promote domestic production.
Recent data from research firm Counterpoint indicates that imports of fully assembled laptops fell by four percent in the first five months of 2024 compared to the previous year, with companies like Lenovo and Acer increasing local assembly for entry-level laptops. Concerns over cyberattacks and data theft have led India to emphasize the importance of “trusted sources” for electronics and communication devices. Additionally, Indian Prime Minister Narendra Modi has advocated for reducing reliance on foreign countries for communication technology, including servers.
Starting in April 2025, India will implement mandatory testing of essential security parameters for all CCTV cameras, further reflecting its commitment to enhancing the security of its electronics ecosystem.
