New Delhi: More than two months after it restricted the import of laptops, personal computers, and tablets, the central government Thursday announced an online system for IT hardware firms to seek import “authorisation” instead of a “licence” as announced earlier. However, such hardware will continue to remain under the category of goods and services that are “restricted” for import, a policy circular from the Directorate General of Foreign Trade under the Ministry of Commerce & Industry said Thursday.
The government had in August this year, in a surprise notification, announced “restricting” the import of laptops, tablets, all-in-one personal computers, ultra-small form factor computers, and servers. It had said that the imports of these items would only be allowed for those holding a valid licence.
While this was initially to be implemented with immediate effect, the government later announced a transition period after the industry raised strong concerns.
Thursday’s notification has not materially changed the provisions of August’s notification, with the government still empowered to implement additional curbs should it choose to, an official in the Ministry of Commerce and Industry told ThePrint.
The government, however, has assured the industry that it will not reject any import requests except for companies in the “denied entity list”, which includes firms that have not fulfilled or have defaulted on export obligations by availing of benefits of schemes such as advance authorisation and Export Promotion Capital Goods (EPCG), or having Directorate of Revenue Intelligence cases against them.
Under the import management system, importers will need to apply for an import authorisation instead of the licence the August notification mandates.
“The importers are allowed to apply for multiple authorisations. The authorisations issued shall be valid up to 30th September 2024,” the policy circular issued by the Directorate General of Foreign Trade said.
It also said once the “authorisation” is issued, the quantities mentioned for import may also be amended at any point. This is provided that its overall value remains unchanged.
An industry executive who didn’t want to be named welcomed the move, saying that this would prevent any immediate supply crunch and price fluctuations, especially amid the festive season. He added that the move also gives the industry a year’s time to import hardware without any restrictions on quantity while building up capacities to manufacture in India.
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No ‘material’ change
With the online import management system, the government will collect clear data about specific products coming in from different sources, and monitor it with the aim of ensuring a “trusted supply chain” for electronics in the country amid increasing cybersecurity threats for hardware products, sources in the commerce ministry said.
The 19 October circular also clarified that there are no import restrictions on spares, parts, assemblies, sub-assemblies, components, and other inputs necessary for IT hardware devices.
“Notified IT hardware items essential for capital goods are exempt from import licensing requirements. For instance, laptops/tablets accompanying machinery such as MRI machines, CNC machines, Unmanned Arial Vehicles (UAVs), etc., are examples of allowed exemptions. However, if servers or laptops etc. themselves are the primary capital goods, this exemption does not apply,” the circular added.
According to another ministry notification issued the same day, IT hardware manufactured in Special Economic Zones (SEZ) may be imported without an import authorisation on payment of applicable duties.
“Activities such as re-packing, labelling, refurbishing, testing, and calibration alone within the SEZ are not considered as manufacturing for the purpose of availing this exemption from Import Authorization,” this circular said.
Private entities importing IT hardware for supply to the Centre or a state government or agencies will also be exempt from needing an authorisation.
At a press conference Thursday, Director General of Foreign Trade Santosh Kumar Saranagi said that though an online system had been put in place, these IT hardware products were still “under the restricted” category and “there is no change in that”.
This nature of the “authorisation” has been laid out in India’s Foreign Trade Policy 2023 as well. The policy said that for any goods or service, “the export or import of which is ‘restricted’, may be exported or imported only in accordance with an authorisation/permission or in accordance with the procedures prescribed in a notification/public notice issued in this regard”.
“The government has given an assurance that it will not deny anybody this authorisation up to September 2024, but the fact is that nothing stops it from imposing additional curbs before or after that date,” a senior official in the commerce ministry said, adding that even the previous system of requiring a licence empowered the government in this manner.
(Edited by Uttara Ramaswamy)
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