As PC and laptop makers urge the government to rethink its decision on import licensing requirements accompanied by a quota, the industry stakeholders have met IT Ministry officials to seek solutions on the matter.
The meeting discussed proposed changes, like linking the import of IT hardware to the local manufacturing of a company value and its export value of electronic items, according to sources.
The meeting on Friday was called to give suggestions on how the proposed import management system should work and get the stakeholders’ feedback.
Another meeting is likely to happen again next week to continue discussions on the issue.
Last month, the India Cellular and Electronics Association (ICEA) wrote to the IT Ministry, requesting the government to rethink its decision on import licensing requirement accompanied by a quota, which was extended by 3 months until October 31, fearing that this may lead to price rise in consumer electronics products as companies are not yet prepared for manufacturing PCs, laptops and servers domestically at scale.
The letter said that an overarching factor that should be taken into consideration in "avoiding supply chain disruption till domestic production ramps up" is that any “reduction in supplies or even an indication will lead to hoarding and market distortion”.
This, in turn, can push up consumer prices, “which will adversely impact not just key stakeholders such as students, but also those who are the core of growing the digital economy, i.e. start-ups, IT and ITES firms, BPOs”.
The industry seeks at least nine-month breather after the PLI for IT Hardware was 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. It may be too early to assess the full implication of the new scheme before then,” according to the letter.
Where servers are concerned, the ICEA has received inputs that companies in that sector seek a relook at their inclusion in the proposed intervention.
The Central government earlier deferred its decision to restrict the import of certain categories of laptops and computers until November 1, allowing companies three-months time to import these devices.
Post November 1, no entity will be allowed to import laptops, computers, and related items without a license.
The PLI 2.0 for IT hardware has garnered applications from 40 companies including global and domestic. The expected incremental production under the scheme is around Rs 3.35 lakh crore.