India moves to restrict PC and server imports

India moves to restrict PC and server imports

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A new regulation in India will require companies to obtain a license before importing personal computers, tablets and certain other electronics.

India’s Ministry of Commerce and Industry announced the new rule today. It’s effective immediately, but an exception will reportedly be made for electronics that have already been ordered. A source told Reuters that such orders will be allowed to proceed without a license through Aug. 31.

The new regulation applies to laptops, tablets and all-in-one personal computers. Furthermore, “ultra small form factor computers and servers” will require an import license as well. India previously applied a similar requirement to imported smart TVs.

According to government data cited by TechCrunch today, the value of the finished electronic goods that were imported into India last year reached $43 billion. That represents a 32% increase from 2021. As a percentage of overall electronics imports, however, the share of finished products declined by 5% in the same time frame.

Reuters cited a government source as saying that the new license requirement is partly aimed at restricting electronics imports from China. The source elaborated that India’s government has “security concerns” over those products. According to Reuters, China accounts for half the imports covered under the new regulation.

The new rule could potentially impact the local sales of major PC makers such as HP Inc. and Dell Technologies Inc. At the same time, it may drive new business for domestic electronics manufacturers such as Dixon Technologies Ltd. Shares of Dixon jumped 7% on the announcement of the new import rule.

In 2021, India announced a program designed to boost local production of PCs, laptops, servers and related hardware. The original version of the program would have made $892 million worth of incentives available to manufacturers that invest in local production lines. Earlier this year, that sum was more than doubled to just over $2 billion.

India is separately running a $6.6 billion program designed to incentivize local smartphone production. According to TechCrunch, several Apple Inc. hardware suppliers are among the companies that have applied to participate. CNBC separately reported that Apple eventually plans to manufacture a quarter of all iPhones in India.

Other tech industry players are also expanding their local manufacturing infrastructure.

Micron Inc., one of the world’s largest memory chip makers, recently announced plans to build two semiconductor plants in India. The project is expected to cost as much as $2.85 billion. The two plants will focus on assembly and test manufacturing, or the process of turning chip wafers into production-ready memory modules can be installed in computers. 

Image: Unsplash

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