Govt May Extend Existing Import Regime For Hardware Products

SUMMARY

While MeitY has suggested an extension to the existing import authorisation regime, the Commerce Ministry is yet to have taken a call on the matter

The development comes weeks after reports surfaced that the Centre was holding extensive talks with stakeholders to determine whether there was a need for a more tighter regime

Imports of the seven IT hardware items under the import authorisation regime, implemented in October 2023, declined 3.4% YoY to $8.4 Bn in FY24

With the September 30 deadline approaching fast, the union government is reportedly mulling extending the existing regime for the import of IT hardware products.

Sources told Economic Times that the Ministry of Electronics and Information Technology (MeitY) has suggested an extension to the existing import authorisation regime while the Commerce Ministry is yet to have formulated an opinion on the matter.

As per the report, a final decision on the matter is still awaited as the Commerce Ministry is yet to take a call on the issue.

“MeitY was thinking of extending the deadline and continuing with the system but talks are still going on,” an official reportedly said.

The development comes weeks after reports surfaced that the Centre was holding extensive talks with stakeholders to determine whether the regime should continue in its existing form or if there was a need for a more tighter regime.

As the confusion over the new policy prevailed, industry body Information Technology Industry Council (ITIC), which represents industry giants like Apple, Dell, HP and Lenovo, also reportedly last month urged the MeitY to shed more clarity on the import policy for the seven IT hardware products post the deadline.

At the heart of all this is the fracas that broke out last year after the Directorate General of Foreign Trade (DGFT) imposed restrictions on the import of certain IT hardware items including servers, computers, and data processing machines.

Subsequently, the union government allowed companies to import such items but after applying for government authorisation to import these products. At the time, the Centre attributed the restrictions to national security concerns.

Notably, imports of the IT hardware products appear to have taken a hit since the implementation of the regime in October 2023. As per reports, the imports of these products declined 3.4% year-on-year (YoY) to $8.4 Bn between October 2023 and March 2024.

However, despite a decline overall, the imports of the seven IT hardware products from China stayed flat YoY at $5 Bn during the same period too and accounted for 58%-60% of total imports.