Government to Implement Quota System for Electronic Imports from October

The Indian government plans to introduce a new quota-based import authorization system for electronic items such as notebooks, tablets, laptops, and servers in October. The new regime will replace an import management system introduced in late 2023 that is set to expire in September 2024, according to a report from The Economic Times citing unnamed government officials.

According to sources in the Ministry of Electronics and Information Technology who spoke to ET, under the new regime, companies wishing to import electronic goods will need to obtain import authorizations based on quotas. Electronic companies without local manufacturing capabilities in India will face limits on import quantities through quotas. However, those with domestic production may be allowed to continue importing without restrictions.

The electronics manufacturers that have established or are in the process of setting up manufacturing units in India will be given preference in allocating quotas. The quotas will take into account factors like their past import volumes, domestic manufacturing levels and exports from India.

"The objective is to build an IT hardware manufacturing ecosystem in the country and companies need to be supported for this. But if one solely wants to rely on imports with no local manufacturing, it won't serve the purpose," one official told The Economic Times.

27 companies, including Dell, HP, Foxconn and Flextronics, have been approved under India's Production Linked Incentive scheme for electronics hardware. They have committed investments and job targets for local manufacturing.

The new system aims to gradually reduce import reliance and boost electronics manufacturing, as envisaged under the PLI scheme and the government's self-reliance plans. While import limits may impact companies, concessions will be made for those genuinely expanding local production capacity as agreed with the government.

The move is likely to affect major exporters but officials maintain domestic manufacturing will get priority to Build-in-India.