India's import curb's on Laptops: What is the real deal?

What you need to know

India has recently announced new restrictions on the import of laptops and other electronic devices from China and other countries. The move is aimed at boosting domestic manufacturing and reducing the trade deficit, but it could also have implications for consumers, businesses and the environment.

The new rules require importers to obtain a license from the Ministry of Electronics and Information Technology (MeitY) for each consignment of laptops and other devices. The license will be valid for only three months and will be subject to a quota system based on the value of the imports. The quota will be revised every quarter based on the domestic production and demand.

The government has said that the import curbs are necessary to promote the Make in India initiative, which seeks to increase the share of manufacturing in the GDP from 16% to 25% by 2025. The government hopes that the import curbs will encourage foreign companies to set up local production units in India, creating jobs and reducing dependence on imports.

However, some experts have raised concerns about the impact of the import curbs on the laptop market and the economy. They argue that the import curbs could lead to a shortage of laptops and other devices, especially in the festive season when demand is high. This could result in higher prices, lower quality and reduced consumer choice.

Moreover, the import curbs could also affect the competitiveness of Indian businesses, especially in the IT sector, which relies heavily on laptops and other devices for their operations. The import curbs could increase their costs and reduce their efficiency, hampering their growth and innovation.

Additionally, the import curbs could also have environmental consequences, as they could discourage recycling and reuse of electronic waste. India generates about 3.2 million tonnes of e-waste annually, of which only 20% is recycled. The rest is either dumped in landfills or burned, causing pollution and health hazards. The import curbs could reduce the incentive for e-waste management, as they could make it more profitable to import new devices than to refurbish old ones.

Therefore, while the import curbs may have some benefits for domestic manufacturing, they could also have negative effects on the laptop market, the economy and the environment. The government should consider these trade-offs carefully and adopt a balanced approach that supports local production without compromising consumer welfare and environmental sustainability.

How will this affect consumers?

If you are planning to buy a new laptop or upgrade your old one, you may want to do it soon. India has recently imposed new restrictions on the import of laptops and other electronic devices from China and other countries, which could affect the availability, price and quality of these products in the market.

The new rules require importers to obtain a license from the Ministry of Electronics and Information Technology (MeitY) for each consignment of laptops and other devices. The license will be valid for only three months and will be subject to a quota system based on the value of the imports. The quota will be revised every quarter based on the domestic production and demand.

The government has said that the import curbs are necessary to promote the Make in India initiative, which seeks to increase the share of manufacturing in the GDP from 16% to 25% by 2025. The government hopes that the import curbs will encourage foreign companies to set up local production units in India, creating jobs and reducing dependence on imports.

However, some experts have raised concerns about the impact of the import curbs on the laptop market and the consumers. They argue that the import curbs could lead to a shortage of laptops and other devices, especially in the festive season when demand is high. This could result in higher prices, lower quality and reduced consumer choice.

For instance, according to a report by IDC, India's laptop market grew by 67% year-on-year in the second quarter of 2021, driven by strong demand from consumers, education and enterprise segments. The report also said that the average selling price of laptops increased by 15% year-on-year due to supply constraints and rising component costs. The import curbs could further aggravate these issues and make laptops more expensive and scarce.

Moreover, the import curbs could also affect the quality and variety of laptops available in the market, as they could limit the access to global brands and technologies. India's domestic laptop production is still nascent and largely dependent on imports of components and parts. The import curbs could hamper the development of the local industry and reduce its competitiveness.

Therefore, while the import curbs may have some benefits for domestic manufacturing, they could also have negative effects on the laptop market and the consumers. The government should consider these trade-offs carefully and adopt a balanced approach that supports local production without compromising consumer welfare and environmental sustainability.

Why are experts concrened about the import curb's?

Some of the concerns raised are the following...

• The BIS certification process is lengthy, cumbersome and unpredictable. It can take up to six months or more to get a certificate, depending on the availability of testing labs and inspectors. This can cause delays in launching new products or updating existing ones, especially for global brands that have to cater to different markets and regulations.
• The BIS certification process is costly and redundant. Importers have to bear the expenses of testing, inspection and certification, which can add up to 10-15% of the product cost. Moreover, many imported laptops and other devices already comply with international standards such as CE or FCC, which are widely accepted and recognized around the world.
• The BIS certification process is discriminatory and protectionist. It applies only to imported products, not to domestic ones. This creates an unfair advantage for local manufacturers, who can avoid the hassle and cost of certification. It also violates India's commitments under the World Trade Organization (WTO) and other bilateral or regional trade agreements, which prohibit discrimination against foreign products or services.
• The BIS certification process is ineffective and counterproductive. It does not address the real issues of security and quality, which depend more on the software and firmware than on the hardware. It also does not prevent the entry of substandard or counterfeit products, which can be smuggled through informal channels or misdeclared as other goods. It also discourages innovation and competition, which are essential for improving the quality and affordability of products.

In conclusion, the new rules on laptop imports are likely to have negative impacts on the industry, consumers and the economy. They will increase costs, reduce choices and stifle innovation. They will also damage India's reputation as a reliable and open trade partner. 

Opinion: The government should reconsider its decision and consult with all stakeholders before implementing such drastic measures.