DGFT Extends Existing Import Authorisation Regime Till 2024-End

SUMMARY

In the circular, the directorate, however, said that importers will be mandated to apply for fresh authorisations starting January 1, 2025

The move is expected to offer much needed respite to the IT hardware ecosystem, which has been reeling under the impact of the new import authorisation regime

DGFT last year imposed restrictions on the import of seven IT hardware items including servers, computers, and data processing machines

Heeding to industry demand, the Directorate General of Foreign Trade (DGFT) on September 24 extended the existing import authorisation regime for certain IT hardware products including PCs, tablets and servers till December 2024.

“… It is clarified that the importers are allowed to apply for import authorisations which will be valid up to 31.12.2024. Further, the existing import authorisations issued till 30.09.2024 will continue to be valid up to 31.12.2024…,” read a DGFT circular.

In the circular, the directorate, however, said that importers will be mandated to apply for fresh authorisations starting January 1, 2025. Detailed guidelines on the new authorisation regime are expected soon, said the government.

With this, the Centre has continued with the existing system, which was slated to expire on September 30. The move is expected to offer much needed respite to the IT hardware ecosystem, which has been reeling under the impact of the new authorisation regime.

The development comes a day after reports surfaced that the Ministry of Electronics and Information Technology (MeitY) had suggested an extension to the existing import authorisation regime. However, the Commerce Ministry was yet to take a call on the matter, which delayed the nod for extension.

Prior to this, Indian authorities also held extensive talks with stakeholders to determine whether the import authorisation regime should continue in its existing form or whether there was a need for a more stringent regime.

A major crisis erupted in October last year after DGFT imposed restrictions on the import of seven IT hardware items including servers, computers, and data processing machines. Later on, after industry outcry, the government allowed companies to import such items but after applying for government authorisation to import these products.

Eventually, industry bodies protested the move saying the new regime was slowing down the process of imports. Meanwhile, the Centre stayed put on its stance and cited national security concerns for the move.

Owing to this, imports of these products reportedly took a hit and declined 3.4% year-on-year (YoY) to $8.4 Bn between October 2023 (when the regime was implemented) and March 2024. Noticeably, imports of the same products stayed flat and accounted for 58%-60% of total imports.