Govt tweaks licensing norms for laptop, computer imports; puts in place online authorisation system

New Delhi: The government on Thursday tweaked the cumbersome licensing norms to import IT hardware products like laptops and computers and put in place an online authorisation system for importers of these goods.

The new licensing or authorisation regime, which will come into operation with immediate effect, is primarily aimed at monitoring imports of these products to ensure that they are coming from "trusted" sources, Director General of Foreign Trade (DGFT) Santosh Kumar Saranagi told reporters here.

After taking into account the concerns of stakeholders of the sector, some "tweaking" in the policy has been made, and an end-to-end online system was launched for importers, he added.

The system, he said, will ensure that it will be faceless and contactless, and there will be no hassles for importers to fill in their details.

The announcement assumes significance as the government announced on August 4 that an importer would need a license for the import of these goods from November 1, with a view to boosting domestic manufacturing and cutting imports from countries like China.

The new license regime is applicable to laptops, personal computers (including tablet computers), microcomputers, large or mainframe computers, and certain data processing machines to ensure India's trusted supply chain.

The DGFT also said that an importer can apply from now onwards on the system to seek authorisation for imports, and there would not be any restriction on quantity, value or country.

The Department of Revenue is also involved in the preparation of the new system and the entire application process will take about 10 minutes, and the simple license will be issued in an automated manner.

Companies in the "denied entity list" will not get the authorisations. Such lists include firms which have not fulfilled or defaulted export obligations by availing benefits of schemes like advance authorisation and Export Promotion Capital Goods (EPCG); or having DRI (Directorate of Revenue Intelligence) cases against them, Saranagi said.

Companies willing to import second-hand goods or refurbished items would also not be allowed to apply for this authorisation as for those imports, the standard operating procedure is different.

Though an online system has been put in place, these IT hardware products are still "under the restricted" category and "there is no change in that", Sarangi said.

Speaking at the media briefing, Secretary of the Ministry of Electronics and Information Technology S Krishnan said that the new mechanism was launched after holding an extensive consultation with the industry.

The aim of the exercise is to promote domestic manufacturing of electronic goods, he said, adding there is no shortage of these goods in the country and in fact, more production will help in cutting down the prices.

Applications for several companies have been approved under the production-linked incentive (PLI) scheme for large-scale electronic manufacturing.

The import authorisation will remain valid till September 2024.

On the post-September 2024 scenarios, Krishnan said the government will study the data, interact with the industry, and then, decide on ways to move forward.

When asked whether the government will withdraw the August notification, the DGFT said it will not be withdrawn, and a clarification has been issued to give effect to the new online authorisation system for these imports.

Sarangi also clarified that importers would not be required to register with them to seek authorisation.

The DGFT provided several exemptions to different entities.

In a notification, it said these IT hardware products manufactured in special economic zones (SEZ) can be imported into domestic tariff areas (outside SEZs) without any import authorisation on payment of applicable duties, if any.

Activities like re-packing, labelling, refurbishing, testing and calibration alone within the SEZ are not considered as the manufacturing for availing this exemption from import authorisation.

Private companies importing these goods for supply to central and state government agencies or undertakings or for defence purposes are also exempted from seeking this permission for imports.

"However, these private entities at the time of import must provide to the customs authorities a valid end-user certificate issued by the relevant government entity," it said.

SEZ units, export-oriented units, Electronics Hardware Technology Park (EHTP), Software Technology Park, and Bio-Technology Park are not required to obtain a "restricted import authorisation" for the import of these IT hardware, the DGFT said.

The exemption is allowed only for the captive consumption of the importing units.

There are no import restrictions on spares, parts, assemblies, sub-assemblies, components, and other inputs necessary for these devices.

Laptops/tablets accompanying machinery like MRI machines and unmanned aerial vehicles are exempted, as per the DGFT.

However, if servers or laptops themselves are the primary capital goods, this exemption does not apply, it said, adding exemption is provided for up to 20 such items per consignment for the purpose of R&D, testing, benchmarking, evaluation and product development.

The restrictions are not applicable to imports under baggage rules, and import of one laptop, tablet, personal computer or ultra-small form factor computer, including those purchased from e-commerce portals through post or courier, is also exempted.

"The importers are allowed to apply for multiple authorisations. The authorisations issued shall be valid up to September 30, 2024," the DGFT said in a public notice.

After the issuance of an import authorisation, the quantity as mentioned on a valid authorisation may also be amended at any point, subject to the overall value of the import remaining unchanged.

Further, an importer can track online their application in the new system and there will be an electronic transmission of the authorisation to the customs port of registration.

A weekly video conference will be hosted by the DGFT to address issues and queries of stakeholders.

While seeking the authorisation, an importer will have to provide an import item summary, and details of past import, export, and turnover.

The government in August imposed import restrictions on laptops, computers (including tablet computers), microcomputers, large or mainframe computers, and certain data processing machines. Following this notification, the IT hardware industry had flagged concerns.

India imported these goods worth USD 8.7 billion in 2022-23 against USD 10.3 billion in 2021-22 and USD 7.1 billion in 2020-21.

The country has imported personal computers, including laptops, worth USD 5.33 billion in 2022-23 compared to USD 7.37 billion in 2021-22.

In May, the government approved the Production Linked Incentive Scheme 2.0 for IT Hardware with a budgetary outlay of Rs 17,000 crore. In February 2021, the scheme was approved for IT hardware, covering the production of laptops, tablets, All-in-One PCs and servers with an outlay of Rs 7,350 crore.

The main countries from where these goods were imported in the last fiscal include China (USD 5.11 billion), Singapore (USD 1.4 billion), Hong Kong (USD 807 million), the US (USD 344.7 million), Malaysia (USD 324.8 million), Taiwan (USD 272.5 million), Netherland (USD 132.8 million) and Vietnam (USD 126 million).