Global technology giants like Apple and Samsung, along with other companies importing IT hardware such as laptops, tablets, personal computers, and servers, will not face licensing or quotas starting November 1, as previously announced by the government.

In a meeting with industry representatives, the Ministry of Electronics and Information Technology (Meity) indicated that a credit-based system will be introduced. Under this system, companies will need to register themselves in an import management system.

Companies with production bases in China will be required to shift their supply chain away from there gradually. Those not participating in the IT hardware production-linked incentive scheme will have the option to move their base to Taiwan or Vietnam. Currently, 85% of laptop imports are from China and Hong Kong because even US-based companies have manufacturing facilities in these countries.

Under the credit-based system, manufacturers will be evaluated based on their past year’s imports, progress in domestic manufacturing of IT hardware, and exports from India. Credit points will be allocated to them based on their performance in these areas, which can be used to import IT hardware products.

For example, Apple and Samsung have not applied for the IT hardware production-linked incentive scheme for domestic manufacturing but are manufacturing mobile phones in India under the smartphone PLI and exporting them in large numbers. The credit points they earn through these activities will ensure smooth imports.

Similarly, manufacturers like Dell, HP, Asus, Acer, Lenovo, etc., have applied for IT hardware PLI, and once their applications are approved, they will begin domestic manufacturing and exporting. The credit points they accrue will facilitate imports in the meantime.

During the meeting, the government also clarified that there would be no restrictions on equipment imported for research and development (R&D) and testing.

The import management system aims to address the high dependency on imports from unverified sources. As the country builds its internet infrastructure, Indian cloud and data centers, the servers, laptops, and similar products used in them should come from trusted sources, according to Minister of State for Electronics and IT Rajeev Chandrasekhar.

On August 3, the government initially announced immediate restrictions on IT hardware imports, but it later extended the deadline to November 1 after requests for a broader consultation with the industry. The government clarified that there are no import restrictions but rather an import management system to ensure equipment entering the Indian digital ecosystem is from trusted sources.

India’s electronics imports, including laptops, tablets, and personal computers, amounted to $19.7 billion in the April to June period, a 6.25% year-on-year increase.

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