Economy

Licensing Imports of Laptops

Table of Contents

Context
The Centre’s sudden move to restrict the imports of personal computers, laptops, palmtops etc., marks the reversal of the broadly consistent policy adhered followed by successive governments since the Rajaraman Committee.
Background
  • India has imposed restrictions on the import of personal computers, laptops, tablets, all-in-one PCs, ‘ultra-small form factor’ computers, and servers falling under HSN code 8741.
  • These imports will be subject to a valid license for restricted imports.
  • This move aims to promote domestic manufacturing of these products and reduce reliance on imports from China.
Early Proposals:
  • In 1981, a landmark report by a committee headed by Prof V Rajaraman of the Indian Institute of Science (IISc) proposed concessions for the import of computers against software exports.
  • The recommendation was to effectively reverse what was until then the stated policy of the Government of India — to impose physical controls on these imports.
The Rajaraman Committee report set the stage for the import of computers and their parts, the subsequent computerisation of the Indian Railways passenger reservation system, and the progressive entry of computers into India’s financial sector, eventually catalysing India’s IT revolution.
Computer age in India:
  • The computer were introduced in 1955 with the installation of HEC?2M (a computer designed by A. D. Booth in England) at the Indian Statistical Institute (ISI) at Calcutta.
  • The same year a team headed by R. Narasimhan started designing and fabricating a computer at the Tata Institute of Fundamental Research (TIFR) at Bombay 2000 km away on the west coast of India.
  • In 1955 only a few dozen scientists and engineers in India knew about computers.
  • In 2010 there were over 4 million people employed in computer related jobs and over 60 million Personal Computers were in use.
Computers and Contributions in India’s economy:
  • Contributions to GDP: Information Technology which depends on computers contributed 4% of the GDP of India and IT services became the fastest growing segment among export industries and grew by 22.7% in 2010 with aggregate export revenue of USD 50 billion and domestic revenue of USD 17 Billion.
  • Employment: In the 60s and the 70s there was a lot of trepidation about the use of computers and their impact on employment.
Import of Computers and Licensing norms:
  • All notifications on restrictions, quotas and conditions on the import of goods into India are managed by the Directorate General of Foreign Trade (DGFT).
  • The DGFT comes under the Ministry of Commerce and Industry and is responsible for administering laws regarding foreign trade, including import regulations.
  • Most import licenses are issued by the DGFT, although depending on the nature of the item and its restriction or quota, other authorities may be involved to ensure compliance with various regulations.
  • These regulations include quality standards, safety requirements, and national security concerns.
Validity of license:
  • Import Licenses are valid for 24 months for capital goods and 18 months for raw materials components, consumables and spares, with the license term renewable.
  • Computers and laptops would fall under capital goods.
The license can also be amended to add or change the import goods applied for, although this may also come with a fee.
Types of licenses:
  • Export-Import Policy or Exim Policy outlines guidelines and instructions governing the import and export of products. Most import items fall within the scope of India’s Exim Policy regulation of open general license (OGL) that allows importers to bring in certain goods without the need for individual licences.
  • Items under OGL can be imported freely unless they fall under restricted or prohibited categories.
  • However, computers and laptops will likely fall into the restricted or specific license category.
  • Restricted import licenses are typically issued for goods that must be monitored due to trade agreements, international obligations, or to protect domestic industries.
Exemptions for importer-exporter code (IEC):
  • While IEC is compulsory for imports and exports, there are certain exemptions.
  • This extends to individuals importing or exporting goods for personal use unrelated to trade, manufacturing, or agriculture.
  • It also extends to ministries, departments of central government and agencies, and non-commercial PSUs, among others.
Post Views: 115

Leave a Comment