Local vendors cheer PC, laptop import restriction; no supply chain disruption, says ICEA

New Delhi: As the government announced restrictions on import of laptops, personal computers, and other electronics items to boost local manufacturing, the India Cellular and Electronics Association (ICEA) said on Thursday that there will be no disruptions in supply chain because of the new notification.

The notification issued by the Directorate General of Foreign Trade (DGFT) under the Commerce Ministry notified restrictions on import of laptops, tablets, personal computers and servers.

ICEA Chairman Pankaj Mohindroo told IANS that "We assure the industry and trade that there will be no disruptions in supply chain because of this notification".

"Above all, we assure consumers that all their loved brands will be available as always," he added.

The move brought cheers for domestic manufacturers while there were concerns among foreign vendors regarding the notification. Shares of Dixon Technologies surged about 6 per cent on Thursday. Following the development, its stock rose to hit a high of Rs 4,354.

Dixon Technologies offers design-focused solutions in consumer durables, home appliances, lighting, mobile phones and security devices.

Videotex Director Arjun Bajaj said they are grateful for the government's support in fostering an environment for domestic manufacturing in India by putting an import ban on laptops, tablets, PCs and other products.

"The focus now is on the potential benefits such support can bring to research and development (R&D) and the manufacturing of electronics products in the country. This highly encourages building the whole manufacturing ecosystem in the country," he said.

Videotex has over 50 per cent market share in smart TV ODM space among the contract manufacturers in India, with a manufacturing capacity of 1.4 million TVs per year and expanding a new unit to reach 3.2 million units.

Export of electronic goods from India increased from Rs 39,978 crore in 2016-17 to Rs 1,09,797 crore in 2021-22, showing a compound annual growth rate (CAGR) of 22.39 per cent.

According to data released by the Ministry of Electronics and IT, the country's electronics export was set to reach Rs 1.76 lakh crore in 2022-23.

Tarun Pathak, Research Director at Counterpoint, said with the total laptop/PC market size close to $8 billion annually and approximately 65 per cent of units being imported, the government's move is aimed at promoting domestic production and reducing dependence on imports.

"The industry comprises around 12 million units, and this restriction may lead to some short-term supply disruptions, especially for brands like Apple, HP, and Lenovo,” he said in a statement.

Moreover, with the festive season approaching, a significant period for sales, the industry may face challenges in meeting demand.

"However, it is worth noting that the government's strategy aligns with their recent announcement to extend the application window under the PLI Scheme 2.0 for IT Hardware, offering better incentives to encourage local manufacturing," Pathak added.

The new policy change came as the government earlier this week extended the window for receiving applications under the production-linked incentive (PLI) scheme 2.0 for IT Hardware till August 30.

The PLI Scheme 2.0 for IT Hardware was notified on May 29 with a budgetary outlay of Rs 17,000 crore. Semiconductor design, IC manufacturing, and packaging are also included as incentivised components of the PLI Scheme 2.0 for IT Hardware.

With an anticipated incremental investment of Rs 2,430 crore, the scheme aims to generate an incremental production amounting to Rs 3,35,000 crore.