[BoneCollector]

Government of India bans import of laptops with immediate effect. This will increase the prices of Apple MacBooks and also those of HP, ASUS, Lenovo etc that import the laptops to sell in India.

India on Thursday announced an immediate import restriction for laptops and personal computers, noting that any entity or company planning to bring laptops and computers for sale in India will have to apply for and obtain a "Valid Licence for Restricted Imports".

Link

[Turbanator]

Is this for Real?

The central government on Thursday imposed restrictions on import of laptops, tablets, all-in-one personal computers and ultra-small computers and servers with immediate effect. Any entity or company planning to bring laptops and computers for sale in India will now have to seek permission or license from the government for their inbound shipments.

https://www.ndtv.com/india-news/expl...dtv_topstories

[shankar.balan]

How then does one buy Apple Products and all which are not made in India?
Anyway there is a significant duty that we are paying here in India.

[anjan_c2007]

The move targets fully built units of these devices imported from abroad and the news specially mentions about Apple laptops that are imported. The news also says such devices are being imported from China and South Korea that needs to be curbed. This move desires that the companies importing these build them here in India and avail benefits of the PLI scheme to qualify for incentives. This production linked incentive (PLI) scheme aims to boost domestic manufacturing and offer incentives to qualifying manufacturers by upto 4 to 6% on incremental sales (over base year) of goods manufactured in India. For each such company PLI benefits can be availed for five years with the base year respectively defined.

But all said and done, numerous hardware components for these devices are still imported from China and South Korea. And most the licensed softwares are too imported. So by merely packaging these imported hardwares and softwares (PLI scheme requires a threshold % age of imported vis a vis India made to qualify) can we honestly call these as "Made in India?" But its a welcome step with the rider that the Indian components need to be as "state of the art" and as reliable to the degree we are used to.

[dragonfire]

What? Didn't we leave protectionism behind in 1991 and embrace the free market? Why are we going back to the mistakes of 70s and the 80s?

Next, will they bring back License Raj?

[Nissan1180]

On Reddit I read an interesting perspective: Some are saying that this move is aimed at preventing small players in the data center business from growing competitively because some company that is seen favourably by the ruling dispensation has recently started a data center business. This company in question has monopolies in its other sectors hence the data center sector is unlikely to be allowed to be competitive.

One may or may not agree with this possibility, but it is an interesting perspective nonetheless.

[FrozeninTime]

Originally Posted by dragonfire

What? Didn't we leave protectionism behind in 1991 and embrace the free market? Why are we going back to the mistakes of 70s and the 80s?

Next, will they bring back License Raj?

The Liberalisation of 1991 was never accepted by Political elites and Bombay club. As Indian economy slowly stabilised, Politicians slowly bought old socialist policy packed in new form.

The list is endless but to name a few:
1. Retrospective Tax which even current GOI was reluctant to withdraw.
2. Calling all investment from Chinese as bad for country even though we are more reliant on them than ever.
3. promoting flop industries like cottage toy industry by banning imports of toys in the guise of mandatory BIS certification.
4. CSR: a program introduced in 2004 to redistribute corporate wealth.
5. Even Make in India is nothing but farce.
6. ED raids on Chinese investment and calling out Korean investment as bad for economy

P.S:
1. The issue is of knee jerk policy and looks to favour a particular Industrial group.
Co incidentally,the company launched its laptop with its own OS just yesterday.

2. Question arises are we heading towards a closed economy like that of 1980s with high inflation?

[SmartCat]

JioBook is not a laptop. It is a hybrid between laptop and tablet, and has all of 64GB storage space. As for the Adani/Ambani data center conspiracy theory, if there was any truth in that, Govt would have just put only servers under import restrictions category and not desktop/laptops.

Meanwhile, here are India import numbers:



But overall market is worth $8 billion a year. So we already have manufacturing here in India by contract manufacturers like Dixon. It looks like Govt is nudging Apple & other biggies to bring manufacturing to India (just like iPhones). Apple PC imports alone are close to $1.5 billion a year. But the Govt is also dangling a carrot in the form of $2 billion incentive scheme to bring manufacturing to India.

Similar restrictions was made for TV imports in 2020, and it did not affect supply. Quoting from above link:

Import policy of colour television is amended from free to restricted, DGFT said in a notification

So I think we have to read the news as "India puts laptop/computer imports under RESTRICTED category". This conveys the seriousness of Govt's decision to PC brands. Hopefully, the decision makers are not stupid to restrict inflows (supply) of laptops/desktops till manufacturing capacity picks up.

< fingers crossed >

[shankar.balan]

I was just reading some more on this new policy.
There is something called ‘covered telecommunications devices’. Made by Huawei and ZTE and all.
The US also asks for declarations that any of their service vendors are NOT using such things.
Now on one side GOI could be concerned about various devices which potentially can be embedded in these laptops and other ‘Made in China/ Korea etc’ machines and sit quietly there like sleepers and gathering information of different kinds and relaying it back to China or Korea or wherever.
(Or something more nefarious!…Remember the movie Kingsman!?)

https://youtu.be/z7-tkkcC6d0

But I think the real reason is to push all these brands to become serious about manufacturing in India and invest in the same instead of just paying lip service. I would only worry about essential micro-component parts and their consistency of quality and availability of regular supply.
Its great to encourage manufacturing here in India. But it would be good if the GOI put out some timelines within which the brands need to become compliant, and restricts all the imports after that time has elapsed rather than this ‘one fell swoop’ ‘draconian diktat’ being announced one morning. The same logic goes for tyres and tyre imports and more or less anything else which is not made in India, like scale model toy cars for example.

[condor]

Originally Posted by dragonfire

What? Didn't we leave protectionism behind in 1991 and embrace the free market? Why are we going back to the mistakes of 70s and the 80s?

The flip side of that free market that you are referring to is dependency on other countries. Too much dependency will end up in being held to ransom. Anjan and Smartcat have better explained above why this is good.

[Hayek]

Frankly our politicians and bureaucrats have no clue whatsoever about what makes economies successful. We are on the path the repeat the same mistakes we made between 1960 and 1991.

Licensing is far worse than import duties. If you want to encourage local manufacture, a 10% customs duty should be more than enough. After all, Foxconn’s Operating Profit margin globally is 2.5% - so a 10% tariff gives you 4 times the margin just from the tariff that the world’s biggest electronics manufacturer makes.

With licensing, no import is legal except for those the government deems worthy of importing products. As Mr Narayana Murthy said recently, back in the day, it took them 3 years and 50 visits to Delhi to import a computer.

The same sad story will apply to the founders of tomorrow. And manufacturers who set up to tap a market with infinite import protection are not going to be efficient or competitive. In short, favoured industrialists will benefit and the average Indian will lose.

I do hope the government relooks at this policy. But sadly our media has become an echo chamber and there seem to be no kids out there to tell the Emperor he has no clothes.

[OrangeCar]

Wow.. Deja vu of licensing era. We were a country that took one step forward and two steps backward. It seems we are quickly evolving into no step forward and giant leaps backward.

Licensing in any form, except for goods/services that could case harm to life/environment should strictly be opposed. Licensing is an ugly form of governments using their brutal authority. And unfortunately, such decisions are taken quickly and are rarely reversed.

I understand there is business conglomerates’ conspiracy and Chinese imports theory discussed. Is the entire government and its apparatus so bankrupt that they haven’t figured out a way to reduce dependencies on import and increase manufacturing? And therefore take the licensing route.

Irrespective of what logic and reasoning exists, any sort of licensing has to be opposed. How long before one has to get a license to buy a laptop, or get internet because people nowadays write against governments online? How long before one has to obtain licenses to show/watch foreign movies, because they do not adhere to our cultural values?

This post might seem an overreaction. But I just refuse to accept licensing and control by state in any form. Our direction has to be to be a much more free society. Bankruptcies in ideas to ensure governance and progress should not mean authoritarianism of government goes about putting in walls in the form of license.

[GTO]

Wow, now that's quite the bold move! But frankly, I am a big fan of the "if you want to sell here, build here" philosophy. I have always supported the local manufacturing of cars, and the heavy taxation on CBU imports. Here too, I will support the local manufacturing of computers & laptops.

Local manufacturing brings investments, real estate purchases, job creation, training, development of supply chains etc. India is a HUGE market & anyone who wants to sell here should build here. And unlike say, a Singapore or Dubai, we aren't strapped for manufacturing resources.

Originally Posted by SmartCat

But overall market is worth $8 billion a year. So we already have manufacturing here in India by contract manufacturers like Dixon. It looks like Govt is nudging Apple & other biggies to bring manufacturing to India (just like iPhones).

Similar restrictions was made for TV imports in 2020, and it did not affect supply.

Bingo . Thank you for this insightful post.

Originally Posted by Hayek

If you want to encourage local manufacture, a 10% customs duty should be more than enough. After all, Foxconn’s Operating Profit margin globally is 2.5% - so a 10% tariff gives you 4 times the margin just from the tariff that the world’s biggest electronics manufacturer makes.

How many people does Foxconn employ? How many people would it take to merely "collect" that customs duty?

Merely counting customs duty doesn't build local talent, local supply chains or create tens of thousands of local jobs. By that reasoning, we should stop manufacturing cars (5 - 10% margin), open up the import gates and be happy with a 20% customs duty on all automotive imports.

Give a man a bucket of fish and you fed him for a day. Teach a man to fish and you fed him for life. Building a strong, local manufacturing base is "long-term" thinking. Just look at how powerful our auto industry is today and the enormous contributions it brings to our great country.

[BoneCollector]

There are people complaining that this move will help JioBook launched just a few days back. As rightly pointed out by Smartcat, JioBook is not a fully functional laptop, it's kind of a hybrid. Moreover, the JioBook 2023 is not manufactured in India but China. So they'll also face similar issues like major brands. The previous JioBook was most probably manufactured in India.

JioBook 2023


Previous JioBook.

[androdev]

What happened in the case of tyre manufacturing? To me, it looks like a lot of budget category tyre manufacturing is taking place in India since the implementation of import restrictions on tyres. Maybe something similar will happen here as well. A large ambitious country has got to take some tough policy decisions to promote local manufacturing - can't afford to depend on imports.

Some favoured businesses taking advantage of this policy - that problem is not going away anytime soon and can't be the reason to stop promoting local manufacturing. In general, I think there is an overall theme of arm twisting companies to take up local manufacturing across industries and it augurs well for the country in the very long run.