In an unexpected step, Prime Minister Narendra Modi’s administration in India has restricted the import of desktops and laptops in an effort to promote indigenous manufacture in the IT industry.
The Ministry of Commerce and Industry announced on Thursday that importers will now need to submit license applications in order to bring laptops, tablets, personal computers, and other electronic gadgets into the nation. Such things might be imported without restriction in the past.
Although Modi has actively pushed his “Make in India” initiative, which supports home production in an effort to increase job creation, the ministry didn’t give a rationale for the change in regulations. It comes after a similar ban on the importation of smart TVs in 2020.
According to Reuters, India’s electronic imports were $19.7 billion from April to June, up 6.25% over the same time in 2022.
India’s attempt to increase domestic manufacturing comes at a critical time for the most populous country in the world, as businesses turn outside of China to secure essential supply chains.
According to the Organisation for Economic Co-operation and Development, India’s population of working age is anticipated to reach one billion over the following ten years. Global businesses looking for alternatives to China’s manufacturing hubs frequently choose the nation because of its huge and young labor population.
Apple already manufactures between 5% and 7% of its products in India, according to Piyush Goyal, India’s commerce minister, who made the claim earlier this year.
At a January event, he stated, “If I’m not mistaken, they are targeting to go up to 25% of their manufacturing.”
The US semiconductor company Micron (MICR) announced in June the opening of a new factory in Gujarat, in western India, describing it as the nation’s first semiconductor assembly and test production facility.
Micron will invest up to $825 million in the project, which will, in turn, generate “up to 5,000 new direct Micron jobs and 15,000 community jobs over the next several years,” the company claims.
Foxconn, the biggest producer of contract electronics in the world and an important supplier to Apple plans to increase the size of its production facilities in India.
It abruptly announced last month that it was ending a $19.4 billion joint venture with Indian metals and energy behemoth Vedanta (VEDL) that was intended to help establish one of the nation’s first chip manufacturers.
However, the business claimed it remained dedicated to making investments in the Indian chip industry and that it was submitting an application to a government scheme that provides financial aid for the establishment of semiconductor or electronic display manufacturing facilities there.
Bottom Line
This initiative will have multiple implications for the national economy. It is left to be seen how India will be able to meet its demand for the laptops with the help of local manufacturing units. Will it be successful? We will know later on after a few months. Indian government must have planned the growth of local manufacturing units. So, it will attain success to some extent.
