In a notification issued by the Directorate General of Foreign Trade DGFT on 3 August 2023, the government banned the import of laptops, tablets, all-in-one (AIO) personal computers (PCs), ultra-small form factor computers and servers with 'immediate effect'. However, this resulted in officials from the customs department holding consignments of these items at ports of entry. The next day, DGFT issued a clarification stating that import consignments can be cleared till 31 October 2023 without a licence for restricted imports.

While the DGFT has decided to defer till 1 November 2023 the ban on the import of laptops, tablets, AIOs, PCs, ultra-small form factor computers and servers by placing them under HSN 8471 is a 'restricted' category, the decision raises some questions.

The DGFT import ban means Apple, Dell and Samsung cannot make these products elsewhere and export them to India. Indian government has taken this extreme step to ensure that these products are manufactured in India.

This latest move to ban comes after the government has tried and failed to encourage local production using the production-linked incentive (PLI) scheme.

Most of India's laptops and tablets are imported from China, though most mobile phones are manufactured in India. The government had come out with a PLI scheme to encourage domestic production of laptops and computers, but there have been no takers.

A report from The Hindu Businessline says that Apple would skip the subsidy scheme for laptops and computer hardware and focus only on using subsidies provided by the Union government to localise mobile and mobile accessories.

Apparently, Apple is looking to diversify the production of MacBooks to Vietnam by mid-2023. Over half the world's laptops are predicted to be manufactured in Vietnam and Thailand. Moreover, India and Vietnam have a free trade agreement that allows laptops assembled in Vietnam to be sold in India without customs duties.

While the import ban will eventually increase domestic production, India does not produce many of the components for computers instead of complete sets; there will be imports of electronic components with some value addition done in India.

Coming back to the DGFT notification, while it bans imports of laptops, tablets, personal computers and servers, certain use cases have been exempted from the restrictions. These are the import of one laptop, tablet, personal computer, or ultra-small form factor computer through online portals, couriers, or post. Imports under baggage rules also don't fall under these restrictions, the DGFT notification says.

Around 20 of these items have been exempted from an import licence per consignment for purposes like research & development (R&D), testing, benchmarking and evaluation, repair and re-export, and product development.

Given imports would be allowed subject to the condition that the imported goods shall be used for the stated purposes only and will not be sold. Further, after the intended purpose, the products would either be destroyed beyond use or re-exported. The import of these electronic goods, however, is allowed when they are an 'essential' part of a capital good.