The Indian government is planning to introduce a 5 per cent annual reduction in import limits on laptops, tablets, and personal computers starting from 2025, according to sources from Moneycontrol. Reducing laptop imports is a step forward in implementing the 'Make in India' vision, which prioritizes strengthening local manufacturing capabilities and positioning India as a competitive player in the global tech landscape.

Promoting Self-Reliance on Technology

If implemented, this move could revolutionise the IT industry, which is worth $8 billion to $10 billion and heavily reliant on imports. This move seeks to mitigate reliance on imports, particularly from China and Hong Kong, and to encourage domestic manufacturing by companies like Apple.

This policy aligns was India's 'Atmanirbhar Bharat' initiative. Not only is this policy crucial to boost domestic manufacturing, but it also aims to reduce cybersecurity risks. Reducing reliance on foreign-made hardware can help minimize the risk of security breaches linked to external suppliers.

Details of the Policy

Presently, the centre has extended the free import of these items until December 31, 2024. Earlier, the system was set to end on September 30. Sources cited that the import limits would be reduced by 5 per cent annually, using data from the financial year 2024-25 as the base, paving the way for a phased transition towards increased local production. The IT industry is awaiting a formal notification form the government regarding the same.

The proposal aims to replace the current free registration setup with an import authorization system. This new system will be fully online without any manual intervention. It will also offer $2 billion in subsidies to support domestic manufacturers.

Industry Consultations and Incentives

The proposal was initiated following a consultation in early November, involving government officials and representatives from major industry players such as IBM, Dell, Lenovo, and prominent hardware associations. The proposal, if implemented will play a major role in promoting the 'Make in India' initiative by providing manufacturers with subsidies to expand their production facilities. The government's production-linked incentive (PLI) scheme for IT hardware has already attracted major players like Dell, Acer, and Lenovo. 

The $2 billion subsidy will help companies in upgrading manufacturing units, investing in R&D and meeting the growing demand for locally produced tech devices. These funds may encourage both domestic and international companies to invest in India.

Benefits of the Policy

Keeping in mind, India's current geopolitical tensions with China, this policy will help the country reduce its imports from China and strengthen its hardware supply chain. It will also benefit India's national security by ensuring a more independent tech echo system. Economically, this policy will help the country save millions of dollars in foreign exchange. By strengthening domestic manufacturing, India can improve its trade balance by reducing the need for imports.

The shift towards local manufacturing has the potential to generate thousands of additional jobs in sectors such as assembly, logistics, and R&D. Additionally, the government plans to launch skill development programs to equip India's working population with the expertise needed to support the tech industry.

The move is a part of the government's target of achieving self-sufficiency in domestic electronics manufacturing by 2025-26, and in sync with the country's aggressive digital push.