The Indian government is putting in place several measures to help shore up the production of electronics domestically, including the introduction of licenses for the importation of laptops, computers, and tablets.
According to a notification from the Directorate General of Foreign Trade on Thursday, laptops, tablets, all-in-one personal computers, ultrasmall form factor computers, and servers will face import restrictions. Microcomputers, large or mainframe computers, and certain data processing machines will also be subject to restrictions, the notification said.
Exemptions will be made however for up to 20 items per consignment for R&D, benchmarking, repair and return, or product development.
The announcement comes two months after Prime Minister Narendra Modi announced a $2.1 billion (170 billion rupees) incentive plan to tempt computer manufacturers to India, a much larger financial investment than the $888 million (73.5 billion rupees) the government stumped up in 2021 for a program that ultimately failed to attract companies due to a lack of meaningful incentives.
The latest plan proposes a cashback of 5% to companies on the factory gate price of finished products, while the local sourcing of components will offer a financial benefit to manufacturers.
PC shipments down in India
India’s PC market declined by 30% year-on-year in the first quarter of 2023 to about three million units, according to research published by IDC in May 2023.
The consumer segment experienced a 36.1% year-on-year downturn, primarily due to slowing demand and low market sentiment, while the commercial segment declined 25.1% due to reduced and delayed procurement by enterprises and SMEs.
Additionally, all of the five companies with the biggest share of the Indian PC market saw a year-on-year decline during the quarter, with Dell Technologies experiencing the biggest slump in the region, seeing its unit shipments drop by 49.8%.
“PC demand has been sluggish over the last couple of quarters,” said Navkendar Singh, Associate vice president, of devices research, IDC India, South Asia & ANZ, in comments published alongside the research.
“While SMEs are delaying procurement due to the credit crunch, enterprises are reducing or delaying procurement out of recession fears,” he said. “The PC market in India is expected to stay sluggish for a few more months and start recovering from late 4Q23 onwards.”