Why the government banned importing laptops and computers; Know its impact

The central government imposed import restrictions on laptops, tablets, all-in-one personal computers, ultra-small computers, and servers. Any entity or company planning to bring laptops and computers for sale in India will now have to apply for permission or license from the government for their inbound shipments. The General Directorate of Foreign Trade (DGFT) issued the notification in this regard. Restrictions have been imposed under HSN Code 8471 on seven categories of electronic devices.

The HSN code 8471

The Harmonized System of Nomenclature (HSN) code is a classification system used to identify products for tax purposes. Data processing machines are classified under HSN code 8471. This code is used to identify devices that are designed to perform data processing tasks.

Why the government imposed restrictions?

The measure has been announced to promote domestic manufacturing of these products under the recently renewed production-linked incentive (PLI) scheme for IT hardware. The last date to apply for the so-called production-linked incentives in this product category is August 30. According to the PTI news agency, it reduces inbound shipments of these goods from countries like China and Korea.

However, it quoted a government official saying there are various reasons for imposing these restrictions. Still, the main one is "to ensure that the safety of our citizens is fully safeguarded."

"Some of the hardware could potentially have security-related issues and could compromise sensitive and personal data; we have taken into account few of those goods," the official told the news agency.

The impact of the move

Shortly after the announcement, shares of local electronics makers rose. Bloomberg reported that Amber Enterprises India Ltd. gained as much as 3.3%, Dixon Technologies India Ltd. rose 5.5%, and PG Electroplast Ltd. rose 2.8%. Furthermore, the government announcement is expected to affect companies that import most of their products from outside India. Tech giants like Apple will either have to start manufacturing their laptops in India or stop importing their devices into India. The same rule applies to PC manufacturers like Lenovo, HP, Asus, Acer, and Samsung. This will likely lead to an increase in the price of current laptops, computers, MacBooks and Mac Minis in the Indian market. Most laptops and personal computers sold in India are made or assembled in China. The government plans to move all this to India with the new rule. Meanwhile, companies can apply for special permits to bring laptops into India.