On October 19, The Directorate General of Foreign Trade (DGFT) rolled back its proposal to impose licensing requirements on the import of IT hardware products like laptops, notebooks, and servers. 

Instead of getting a license from DGFT to import hardware into India, the government is now looking to control inbound shipments through an “Import Management System“. 

Commerce Secretary Sunil Barthwal stated, “It is monitoring, which we are doing. It has nothing to do with restrictions as such,”

As of 1 November 2023, companies will need to register only on the government’s import management system (IMS).

Also, the Additional Secretary & Director General of DGFT, Santosh Sarangi, announced other significant changes in import rules for electronic items categorized under HSN 8471.  

So, in this article, you will get to know everything about the new rules introduced by DGFT for the import of IT Hardware in India. 

Key Updates on the Import of IT Hardware in India 

On August 3, DGFT notified immediate restrictions on the import of laptops, tablets, and personal computers falling under the HSN 8741 category.

The decision to impose restrictions on the import of IT hardware was met with significant criticism from both the industry and the international community,

Industry giants like Dell, HP, Apple, Samsung, and Lenovo expressed concern about the sudden imposition of import restrictions in August. 

After careful deliberation, the government opted not to impose an immediate ban on imports of laptops, computers, notebooks, and other IT hardware and made substantial modifications to the rules. 

So, here are the modifications introduced by the government:

Introduction of New IT Hardware Import Regime

The new license regime applies to laptops, personal computers, tablets, Notebooks, microcomputers, large or mainframe computers, and certain data processing machines including servers to ensure India’s trusted supply chain. 

Note- The new regime is a management system and not a licensing regime.

Application Process for Import Authorizations

From now onwards an importer can apply on the system to seek authorisation for imports, and there would not be any restriction on quantity, value or country. 

Moreover, importers can apply for multiple authorisations. Further, all authorisations shall be valid till 30th Sept 2024 only.   

Import Authorization Validity and Quantity Control

Until Sept 2024, there won’t be any quantity control on IT hardware imports. Firms will receive import authorisation based on the specified parameters. 

For the current fiscal year, the government will monitor the source and value of devices as part of the import management system. 

Further, quotas and other compliances will follow the initial monitoring period (tentatively post-Sept. 2024). 

Restricted Category of IT Hardware Products

Imports under the tariff head 8741 have been put in the ‘restricted’ category on August 3, 2023. 

According to the Foreign Trade Policy, 2023, these IT hardware products are still “under the restricted” category and “there is no change in that” as per the statement made by DGFT officials.   

Rules for Second-Hand and Refurbished Imports

Companies that are willing to import pre-owned or refurbished goods would not be eligible for this authorization, as the SoP for these imports is distinct from the standard operating procedure.

Importing IT Hardware from Special Economic Zones (SEZ)

IT hardware from Special Economic Zones (SEZs) can also be imported to the Domestic Tariff Area (DTA) without Import Authorization, except for certain activities like re-packing, labelling, refurbishing, testing, and calibration within SEZs from the manufacturing criteria. 

Exemptions for Government Entities and Defense/Security Purposes

Private entities importing IT hardware for government purposes, especially in defence and security, no longer require Import Authorization. 

However, they must provide a valid End User Certificate from the relevant government entity to Customs Authorities during the import process.  

Import of Spare Parts and Components

There are no import restrictions on spare, parts, assemblies, sub-assemblies, components, and other inputs necessary for these IT hardware. 

Exemptions for Specific IT Hardware Applications

Laptops/tablets accompanying machinery like MRI machines and unmanned aerial vehicles (UAVs) are exempted. 

However, if these servers/laptops/tablets themselves are primary capital goods, this exemption doesn’t apply. 

Exemptions are additionally granted for a maximum of 20 items per shipment for research and development, testing, benchmarking, evaluation, and product development.       

You can also check out the official notification issued by DGFT.

Why did the Government Roll Back its Decision to Impose Restrictions on IT Hardware?

India is a major exporter of IT products, with an estimated annual volume of around $7-8 billion. 

In 2022-23, the country’s imports of personal computers, including laptop computers, totalled 5.33 billion USD, which was a decrease from the previous year’s figure of 7.37 billion USD.

Moreover, the import of microcomputers and processors for the last fiscal year amounted to $1.2 million, down from $2.08 million the prior year.

The government is striving to expand its domestic IT hardware production to meet the needs of the country to achieve a 70% penetration rate within three years as this will help in reducing the country’s reliance on imports from non-trusted sources.

As a result of these changes, IT hardware imports will become more accessible to businesses, while maintaining national security standards. 

By streamlining import procedures, the government shows it is responsive to industry needs, encouraging economic growth and innovation.

How Vincular Can Assist You in Achieving an Import License?

Vincular is a Leading Regulatory Compliance Company in India helping manufacturers achieve Import license seamlessly. 

The services we offer go beyond just import licenses; we are a one-stop solution for all your regulatory compliance requirements. 

We also offer a comprehensive suite of Testing, Certification, and Consultation services for a wide range of industries, including BIS-CSR, TEC, WPC, CDSCO, FSSAI and so on. 

For more details, please reach out to us at info@vincular.in or explore our services. 

Also, to stay updated with the latest news subscribe to our Newsletter and WhatsApp Channel today.