India Curbs PC Imports As Modi Pushes For Local Production

An employee works on a laptop at the headquarters of security system developer Staqu Technologies Pvt. in Gurugram, Haryana, India, on Tuesday, Sept. 10, 2019. India is planning to set up one of the world's largest facial recognition systems, potentially a lucrative opportunity for surveillance companies and a nightmare for privacy advocates who fear it will lead to a Chinese-style Orwellian state. Photographer: Anindito Mukherjee/Bloomberg

(Bloomberg) -- India is requiring licenses for the import of computers from laptops to tablets, the latest in a series of government measures intended to encourage local electronics production.

Purchasers need to seek permission to import laptops, tablets, all-in-one personal computers and ultra-small computers and servers with immediate effect, according to a notification from the Directorate General of Foreign Trade. Certain types of PCs that are designated “capital goods” may be exempt, the agency said without elaborating.

Shares in local electronics contract manufacturers rose after the government announcement. Amber Enterprises India Ltd. gained as much as 3.3%, Dixon Technologies India Ltd. rose 5.5% and PG Electroplast Ltd. spiked 2.8%.

The restriction comes on top of policies designed to discourage import of foreign electronics that have been in place for years, including lofty tariffs. Prime Minister Narendra Modi's government has unveiled a 170 billion-rupee ($2.1 billion) financial incentive plan to draw makers of laptops, tablets and other hardware to the South Asian nation as companies look to diversify supply chains beyond China.

The program aims to capitalize on the demand for laptops, tablets and servers in India and also aims to make the country a hub for electronics exports. The last date to apply for the so-called production-linked incentives in this product category is Aug. 30.

Laptops and tablets account for a fraction of India's annual import of electronics of more than $60 billion.

While Apple has yet to begin making iPads or MacBook laptops in India, the incentives and import restrictions could push the Cupertino, California-based company to consider such moves. Other manufacturers who could take advantage of the measures include Dell Technologies Inc., HP Inc. and Asustek Computer Inc.

--With assistance from Shruti Srivastava and Chiranjivi Chakraborty.

(Updates with share movements in third paragraph)

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