The government on Thursday said it has eased the process of authorisation for importing IT hardware such as laptops, tablets, personal computers and servers, although it remained determined to enforce its August decision of putting these items under “restricted” imports from November 1 mainly for three reasons – encouraging domestic production, checking influx of made-in-China products, and ensuring cyber security.

The latest move involves an online system to facilitate instant online authorisation for imports under the tariff head 8741 because these items have been put in the ‘restricted’ category on August 3, 2023, two senior officials said on Thursday.

According to the Foreign Trade Policy, 2023, a restricted item can be imported into the country “only after obtaining an authorisation” from the offices of the Directorate General of Foreign Trade (DGFT).

The new set up was put in place after an “extensive interaction” with the industry and “consultation with all stakeholders”, ministry of electronics and information technology (Meity) secretary S Krishnan told reporters.

READ | No restriction on laptop imports; we are only monitoring: Commerce Secretary

The government on August 3 put these specific items from “free” to “restricted” import list with immediate effect, but on request of the industry, deferred its implementation till October 31.

The director general of foreign trade, Santosh Kumar Sarangi, said that specific IT hardware were brought under the restricted list “as part of India’s effort to ensure trusted supply chain” and the new regime is set to begin from November 1 with “some tweaking” for ease of compliance through an “end-to-end online system”.

A government official present in the meeting, who asked not to be named, said: “Besides online system to facilitate importers, only wording has been changed from ‘license’ to ‘authorisation’, but both have similar connotations as per the FTP 2023. Till October 31, these items are under the free category, hence do not need any authorisation or license or permission for imports”.

As per the WTO’s Information Technology Agreement (also known as ITA-1), signed by India on March 25, 1997, it permits zero duty imports of IT products, which disincentivises local manufacturing of these products.

The automatic licensing or authorisation is a WTO-compliant measure and will nonetheless help incentivise domestic manufacturing of these products, this person said. “Besides, it will also help in collecting import data and check influx of Chinese products,” he added.

According to DGFT data, the total value of India’s import of these items was $8.70 billion in 2022-23, with China having a lion’s share of 59% at $5.12 billion, followed by Singapore (16% or $1404.4 million), Hong Kong (9% or $807.5 million) and the US (4% or $344.7 million).

Federation of Indian Export Organisations (FIEO) director general & CEO Ajay Sahai said, “This is a prudent move. The online authorisation system will help in import monitoring and take appropriate action to protect country’s interest and encourage domestic industry.”

Shashi Mathews, partner at INDUSLAW, said that the digitisation is likely to reduce the burden on stakeholders and should expedite the entire process. “At this juncture, it appears that there are no restrictions imposed based on quantity or value, and the stakeholders can obtain digital authorisations for period up to 30th September 2024. It is also clarified that the stakeholders may seek multiple authorisations for import of IT hardware,” Mathews said.

Sarangi said that importers could now start seeking authorisation for imports without any restriction on quantity, value or country.

Nasscom VP and head of public policy, Ashish Aggarwal, said after industry consultation, the government made the system simpler, such as doing away with the requirement of uploading BIS certificate. “We had asked for this because some products are exempted from obtaining a BIS certificate,” he added.

Mathews highlighted exemptions to help the industry. “In addition to the initial exemption from import license granted to baggage imports, imports of single quantity and for R&D purposes, DGFT has now extended the exemption to imports made by private entities for supply to central or state government, for utilising in defence or security purposes. Additionally, it has been clarified that imports for captive consumption made, made by SEZ, EOUs, EHTP will not require import authorization,” he said.

“The said move by DGFT, in August 2023, came without any prior notice and stakeholders were taken by complete surprise. Implementing digital mechanism to obtain import license, without any restriction to quantity or value should give some comfort to the stakeholders. However, this move appears to be only a temporary arrangement for a period up to September 2024. Government may consider increasing the restrictions post the said date, as the larger intent is to promote the domestic industry in the segment,” he added.