As per government records, IT hardware product imports stood at $8.4 billion, which appeared mostly from China and the remaining from US, Southeast Asia, and Hong Kong.
In an effort to strengthen India’s domestic electronics manufacturing and help achieve self-reliance, the central cabinet has now urged IT product companies to reduce their entire import bill to 5 percent. The import of servers, laptops, tablets, all-in-one personal computers, and ultra-small form factor computers needs to be reduced to a higher extent, government officials said.
On the other hand, keeping in mind the surging demand, the government has even decreased custom duties on several parts of the mobile phones to 10 percent. Now, in order to meet the same, the center even created an import management system (IMS), according to which the companies will have to register themselves, and share actual data of how many laptops and computers are being sourced from other countries, especially China.
The 5 percent reduction in import duty will be centered on the data provided by the Directorate General of Commercial Intelligence and Statistics and implemented from the coming financial year. According to a senior government official, along with the idea of decreasing imports, companies must do value addition upon which the entire import dependence will be reduced. For instance, if a certain electronic product is being sold at $4 billion every year, then it is mandatory for the company to curb import bills to 5 percent by FY25.
At the same time, the companies will have to consider escalating value addition domestically on electronic goods either manufactured or assembled in India. The restrictions are not based on fixed criteria, but on approximate estimates on how much a company wants to import in a financial year. Additionally, the center is likely to commence audits and review on each quarter in regards to the domestic production volume numbers shared with the government.
