Bid to curb laptop imports: IT ministry meets top tech hardware companies | Business News

“The companies were a bit shaken that the import restriction was put in place without consultation. We explained to them that it was not intended, which is why the government quickly moved and created the three-month window,” said a senior government official, requesting anonymity.

The ministry also used the meeting to seek details about the industry’s manufacturing and investment plans in India. “It is expected that over the next one month or so, they will come back with their own ideas on how to create more local production, and their expectations from the government,” the official said.

An industry executive whose firm was represented at the meeting said the corporate headquarters of many companies were “rattled”, because the government’s move to impose curbs was seen as a departure from its promised policy consistency.

Among those present at the meeting were representatives of some of the top hardware companies including Apple, Dell, HP and Acer. The MeitY officials at the meeting included Rajeev Chandrasekhar, Minister of State for Electronics and IT.

“The main concern is that nobody likes licensing. For example, someone who is selling high-performance computers in India does not want to queue up at a ministry to explain why they did not sell something last year and are looking to sell this year,” said the official, explaining the concerns raised by the industry during the meeting.

Another point of contention is that the restriction would impact the import of graphics processor units (GPUs). These devices are crucial for India’s start-ups working on developing artificial intelligence (AI) compute capabilities, which is an indispensable part of building large language models for setting up companies to counter rivals like OpenAI. GPUs fall under the category of automatic data processing machines.

The IT Ministry is expected to write to the DGFT to reconsider the way it classifies IT hardware. “DGFT, the way it classifies IT hardware, also includes GPU cards. That needs to change, GPUs should not be treated at par with IT hardware,” the official said.

As reported by The Indian Express, the DGFT’s first notification last week set off alarm bells at some of the biggest hardware companies whose consignments got stuck at Customs. Companies like Apple and Samsung froze imports till the time there was clarity on the issue.

The move shocked the industry given its timing – right before the festive season — and added to the headache of manufacturers, already grappling with a global glut of inventory and few triggers to restart sales growth.

Even as India positions itself as a manufacturing hub for electronics, relying on the traction its smartphone-making scheme has seen so far, it is heavily dependent on imports to meet the domestic demand for laptops and personal computers. More than 75 per cent of India’s total $5.33 billion imports of laptops and personal computers in 2022-23 was from China.

Multiple industry sources had earlier said the government’s action stemmed from the fact that its Production-Linked Incentive (PLI) scheme for IT hardware was finding little traction so far. The scheme was revised in May with an outlay of Rs 17,000 crore, double of what was first cleared in 2021.
Sources at the IT Ministry, however, contested this. They said that 44 companies have so far registered for the scheme, with two – one being HP Enterprises – having submitted applications detailing their investment and manufacturing plans.