IT OEMs Urge Govt To Defer Oct 31st Deadline For Import Licensing Norms

A number of original equipment manufacturers (OEMs), under the umbrella of the India Cellular and Electronics Association (ICEA), have reportedly written a letter to the government and urged to defer the October 31 deadline for the implementation of licence mandates on the import of laptops and servers.

In the letter, written to the Ministry of Electronics and Information Technology (MeitY) Secretary Alkesh Kumar Sharma and seen by The Hindu Businessline, the ICEA called for delaying the import restrictions by at least nine months after the implementation of INR 17,000 Cr production-linked-incentives 2.0 (PLI 2.0) for manufacturing IT hardware. 

“… Realistically, nine months after the PLI for IT hardware has been launched, the government may undertake a re-assessment of the investment pipeline and the supply situation before inviting the industry to discuss whether any further policy intervention is needed at that stage,” read the letter dated August 22. 

ICEA represents the interests of industry giants such as HP, Dell, HP Enterprises, Apple, Acer, Asus, and Lenovo.

This comes weeks after the government announced import restrictions on certain electronic items such as laptops, tablets and servers over national security concerns. Citing the promotion of local hardware manufacturing in the country, the Directorate General of Foreign Trade (DGFT) directed the OEMs to procure a mandatory licence before importing such products. 

While the Centre had initially set August 3 as the date of implementation, it later deferred the deadline to October 31 after protests from the industry.

In the letter, ICEA urged the government to wait at least nine months to assess the full implication of the PLI 2.0 scheme. 

While noting that its server manufacturer members called for a relook at the proposed mandates, ICEA called on the government to ‘layer interventions’ in a way that works well for the entire industry. 

“… Overall, we will request the government to layer any intervention in a manner that works well for the industry as a whole, since individual companies are differently placed, at varying degrees of investments and products at this stage,” the letter stated. 

Meanwhile, industry sources told the publication that the situation was volatile, adding that the government was pushing for all hardware manufacturers to apply for the PLI scheme while the sword of import restrictions dangled over their heads. 

Amid the row, global as well as domestic IT hardware companies continue to make a beeline for the PLI 2.0 scheme for manufacturing IT hardware. 

Just a day ago, IT Minister Ashwini Vaishnaw said that major OEMs, including HPE, HP, Dell, Foxconn, Acer and Thomson, directly or in partnership with local companies signed up for the scheme. In total, 38 companies, including local players such as Dixon Technologies, VVDN Technologies and Netweb Technologies, applied for incentives under the scheme. 

In total, India is expected to see an investment windfall to the tune of INR 2,430 Cr from IT hardware players looking to set up a base in the country. The PLI scheme has been envisaged to promote domestic manufacturing of laptops, PCs and servers.

It is pertinent to note that the Indian market for laptops and personal computers (PCs) continues to be dominated by the likes of global companies such as Dell, HP, Acer, Samsung, and Apple, among others. 

As per a report, the homegrown laptop and PCs accounts for a market size of $8 Bn annually, with nearly 65% of the units being imported.