India limits imports of laptops and computers in bid to push local manufacturing

Country has been trying to boost manufacturing through production-linked incentives in more than two dozen sectors, including electronics

Dell, Acer, Samsung, LG Electronics, Apple, Lenovo and HP are among the companies that sell laptops in the Indian market. Reuters

India has restricted imports of laptops, tablets and personal computers with immediate effect, a government notice said on Thursday.

The move is a bid to push local manufacturing.

"Their import would be allowed against a valid licence for restricted imports," the notice said.

Between April and June, electronics imports, including laptops, tablets and personal computers, was $19.7 billion, up 6.25 per cent year-on-year.

Electronics imports range from 7 per cent to 10 per cent of the country's total merchandise imports.

"The move's spirit is to push manufacturing to India. It's not a nudge, it's a push," said Ali Akhtar Jafri, former director general at electronics industry body MAIT.

India has been trying to push local manufacturing through production-linked incentives in more than two dozen sectors, including electronics.

It has extended the deadline for companies to apply for its $2 billion manufacturing incentive initiative to attract big-ticket investments in IT hardware manufacturing, which covers products such as laptops, tablets, personal computers and servers.

The incentive scheme is key to India's ambitions to become a powerhouse in the global electronics supply chain, with the country targeting annual production worth $300 billion by 2026.

Dell, Acer, Samsung, LG Electronics, Apple, Lenovo and HP are some of the major companies selling laptops in the Indian market. A substantial portion are imported from countries such as China.

Shares of Indian electronics manufacturer Dixon Technologies rose more than 5 per cent on the news.

The intent seems to be "import substitution of certain goods that are imported heavily", said Madhavi Arora, economist at Emkay Global.

Laptops, tablets and personal computers comprise about 1.5 per cent of the country's total annual imports and nearly 50 per cent of those are bought from China, government data shows.

India has imposed high tariffs in the past on products including mobile phones to improve domestic output.

Last year, it produced $38 billion worth mobile phones in the country, while local production of laptops and tablets were $4 billion in comparison, according to estimates from the India Cellular and Electronics Association.