India's rapidly evolving IT hardware import landscape presents both challenges and opportunities. Here's what businesses need to know to stay compliant and competitive.
The Central Government of India with the Directorate General of Foreign Trade (DGFT), under the aegis of the Ministry of Commerce and Industry, amended the import policy by restricting the import of Information Technology (IT) Hardware. The policy has stirred into effect from November 1st, 2023, intending to regulate and incentivize the import of laptops, tablets, all-in-one personal computers, and ultra-small form factor computers. The main objective was to ensure a spur in domestic manufacturing and reduce dependence on hardware imports.
Key Provisions of the Import Policy
Import Authorization Requirement
The import of laptops, tablets, all-in-one personal computers, ultra-small form factor computers, and servers under HSN 8471 now require import authorization. Import consignments till October 31st, 2023 were cleared without the need for import authorization.
Exempted Items from Import Authorization Requirements
- Import of one such item of the above-listed products.
- Up to 20 such items per consignment for R&D, Testing, Benchmarking and Evaluation, repair and re-export, and Product Development purposes. Imported goods shall not be sold.
- Re-import of items repaired abroad, and when the item is an essential part of a capital good.
- Import for repair, return, or replacement of IT hardware sold earlier, and re-import of items repaired abroad — on a self-certification basis.
- IT hardware manufactured in Special Economic Zones (SEZ) imported into Domestic Tariff Area (DTA), subject to specific duties.
- Private entities importing products for supply to Central/State Government or agencies for Defense or Security purposes, provided a valid End User Certificate is submitted.
- SEZ units and EOUs/EHTP/STPI/BTP's import of IT hardware only for captive consumption.
- IT hardware items essential for capital goods.
Additional Clarifications
The DGFT has made clarifications and directions for the smooth implementation of the import policy. The import of spares, parts, assemblies, sub-assemblies, components, and other inputs for IT hardware is not restricted. Import authorization has been required from November 1st, 2023, importers are permitted to apply for multiple authorizations, and issued authorizations are valid until September 30th, 2024.
How to Obtain Import Authorization
The application shall be done through the DGFT website. The DGFT has initiated an import management system with a one-week approval target. The step-by-step guideline is as follows:
Firstly, the user needs to register on the DGFT portal to obtain valid login credentials.
Secondly, the user shall apply for Restricted Imports — Permanent IEC User:
- Have an active bank account for payment of the application fee.
- On the DGFT website, navigate to: Services > Import Management System > Import Authorisation for Restricted Imports > Apply for New Authorization.
- A Draft Application screen appears; select 'Start Fresh Application' or 'Proceed with Existing Application' if a saved draft exists.
- Fill in the General Information Screen: IEC, branch code, name and mobile number of the nodal officer. Save.
- On the Import Item Type screen, select the type of product to be imported.
- Fill in Details of Items of Import, details of imports under license in the preceding 3 licensing years (optional), and declare sales/turnover of items. Click 'Save and Next'.
- Select the port and purpose of import.
- Fill in Other Details — Canalised Item Details and Government Department supplies details if applicable. Click 'Save and Next'.
- Accept the terms and conditions on the Declaration screen. Update the 'Place' field if required. Click 'Save and Next'.
- Review the Summary Page, verify all filled-in details, and click 'Payment' to submit the application fee.
- On the application fee payment screen, verify fee details and click 'Submit'.
- After successful payment, a receipt is displayed and can be downloaded/printed.
- The user will receive the application submission message with File Number on screen and via email/SMS. Click 'OK' to be redirected to Submitted Applications via My Dashboard.
This online authorization system permits subsequent filing of amendments. The user can amend the quantity specified in the Import Authorization, subject to the condition that the overall value of authorization remains unchanged.
Way Forward
From October 1st, 2024, the government aims to implement an authorization mechanism with quotas and the possibility of annual renewal. This phased approach is a strategic plan to fulfil the objective of meeting 70% of the country's IT hardware requirements through local production within the next three consecutive years.
Apart from the restrictive policy, the country should focus on building comprehensive strategies to attract investments and strengthen manufacturing networks, creating favorable conditions for companies to expand operations and encouraging partnerships that facilitate technology transfer and skill enhancement in the IT hardware sector.
Our Role as Foreign Trade Policy Experts
“Possession of an import authorization for the import of IT Hardware has been made mandatory — our experts stand ready to guide clients through every step of the process.”
— Sharp & Stellar Advisory
Our experts, having catered to various industries with experience in import/export promotion and regulatory matters, stand ready to guide clients through the intricacies of the import policy, application procedures, and filing of amendments — ensuring a seamless and compliant import process and supporting the growth and sustainability of businesses.
Disclaimer. This article constitutes a part of the Firm's internal resource materials and is made accessible on the Firm's website with the intention of offering knowledge and awareness to its employees and clients. The opinions and information provided in this article are not legally binding on any governing authority, and there is no guarantee that the authorities will not adopt a position contrary to the views expressed herein. The article takes into account the prevailing foreign trade policies as of its publication date. Any party other than those explicitly mentioned above should seek prior written advice from the Firm or the article's author before relying on the content for the purpose of making any commercial decisions.
