India will impose a licensing requirement for imports of laptops, tablets and personal computers to ensure security of its citizens, a source familiar with the matter, adding the decision was in compliance with the World Trade Organization’s requirements.

India has announced that it will require a special license for importing laptops, tablets, and personal computers, effective immediately. The new rule could affect major global brands such as Apple, Dell, and Samsung, and force them to increase their local production.

Industry executives said a licensing regime would mean prolonged wait times for each new model they launch and would come just ahead of a festive season in India when sales typically surge. The government in its notification gave no reason for the move, but Prime Minister Narendra Modi’s government has been promoting local manufacturing and discouraging imports under his “Make in India” plan.

India’s electronics imports, which include laptops, tablets, and personal computers, stood at $19.7 billion in the April to June period, up 6.25% year-on-year.

India has extended a deadline for companies to apply for a $2 billion incentive scheme to attract investments in IT hardware manufacturing. The 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. The country has imposed high tariffs in the past on products like mobile phones to catalyse domestic output.

Implications:

• The move is seen as part of Prime Minister Narendra Modi’s “Make in India” initiative, which aims to boost domestic manufacturing and reduce reliance on imports. India’s electronics imports, which include laptops, tablets and personal computers, amounted to $19.7 billion in the April to June quarter, up 6.25% from a year ago.
• The sudden move could mean that companies like Apple, which sells MacBooks as well as Mac mini and other computers, will have to immediately stop importing these gadgets in India
• The same rules also apply to companies like Lenovo, HP, Asus, Acer, Samsung, and others that too sell laptops and personal computers in India after importing them from abroad.
• The move may also help companies like Reliance, which launched JioBook just two days ago, and other Indian companies. Although these companies are likely to import their laptops from China, the move is still likely to help them because local companies may find it easier to get the import exemption license.
• Although in the long-term — if and when companies like Apple and Lenovo start local manufacturing or assembling — the prices of laptops and computers in India may come down again. It is worth noting that India has announced import restrictions only on finished laptops and computers. The parts of these machines can still be imported freely.

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