Rama Krishna Sangem
The recent restrictions imposed on import of laptops, computers and other IT gadgets may lead to increase in their prices in the market besides creating sort of crisis due to their shortage. This adverse impact on the IT hardware is expected due to people’s plans to buy new gadgets in the coming festival season – that spans from September to December, say retail industry sources in Hyderabad.
The Centre has issued a notification asking the IT hardware companies to apply for licenses to import laptops, computers and other related appliances last week. First the Centre said, the restrictions will come into force from September 1 and extended it to November 1. The liberal timelines for imports was extended from August 31 and October 31 at the behest of IT hardware and some mobile companies.
All the major IT hardware firms lime Apple, Dell, HP, Samsung and Lenovo have requested the Centre to extend this deadline by at least 9 months, July 204, or if possible by October 31, 2024. This shows the present capacity of these firms to manufacture these gadgets within the country is just impossible. If that is the case, the available stocks will not be enough to meet the surging demand for laptops, personal computers etc.
Some seniors in IT hardware retail sector in Hyderabad told Excel India that 90 per cent of the laptops, computers and other accessories of leading global brands are made of imported components – up to 80 per cent. That means, these imported components are either assembled or fabricated in India. All these companies have set up their units in our country since recently, so they are yet to acquire capacity to manufacture them 100 per cent here.
Some Indian companies like Reliance Jio have started making affordable laptops for students and other low end customers locally, but they too need import of some components – maybe around 25 to 35 per cent, said the experts who know the situation. “Overall, we are going to see a situation like when last year, cars and SUVs couldn’t meet demand due to chips shortage after Covid pandemic,” said a retailer in CTC market in Secunderabad.
Shortages & Price rise in Seconds
Unlike cars and SUVs, the electronic gadgets cannot withstand the shortages in supply side. If authorized showrooms will suffer from shortage of stocks, the second hand market will witness jacked up prices. Some middle- class and students cannot afford this price hike. Overall, the situation will create some sort of crisis for the entire segment – both sellers and buyers.
Unconvincing reasons
Entire business media is full of articles against these restrictions. Most respected commentators cried foul – saying this is nothing but return of license permit raj – India ended 32 years back, in 1991. The reasons given by the Centre for the import restrictions too are unconvincing. The Centre gave three reasons for its decision: 1, to curb trade deficit with China, 2, Security reasons and 3, to push up domestic manufacturing.
Of the around 8.2 billion US dollars imports of these IT hardware, 30 per cent comes from China. Even if we replace China with other countries, the import bill will surely go up. Another reason of national security too is tricky – there are enough ways to check security proof of these gadgets, banning them is not a way. Last reason of ramping up of domestic production too is far fetched. This may take 2-4 years.
Can we wait till then with thee shortages? Moreover, the process of applying for licenses too is not transparent. The top officials to government too couldn’t clarify the doubts of IT companies executives. Why, what and how – to get an import license is still a puzzle. Now PM Modi should solve this situation through his intervention in two ways – One, to extend the deadline till July or October 2024 or simplify the license process.
