India aims to achieve 70% domestic IT hardware production in 3 years

NEW DELHI — The Central government plans to meet up to 70 per cent of the country’s demand for IT hardware through domestic production within the next three years and reduce dependence on imports from non-trusted sources, Minister of State for Electronics and IT Rajeev Chandrasekhar said on Friday.

“At present, almost 80 per cent of our supplies to the digital ecosystem come from imports, and only 8-10 per cent of our supply requirements come from India. We aim to increase that to 65-70 per cent in the next three years,” the minister told journalists.

Close to 40 companies, including global giants such as HP and Dell, have applied under the IT hardware PLI (Productivity Linked Incentive) scheme to set up factories for manufacturing personal computers, laptops, tablets, servers, and other equipment. The value works out to be around INR 4.65 lakh crore during the scheme period. The restrictions being introduced on imports are expected to stimulate a surge in domestic investment.

Chandrasekhar said a draft of IT hardware import rules would be discussed with industry players later in the day as part of the strategy to reduce dependence on imports from non-trusted sources, an oblique reference to China.

Senior officials also point out that India’s trade deficit with China has soared to unsustainable levels, and in any case, there is a need to reduce imports from the Asian neighbour.

The government has already announced a clampdown on imports and has given a transition period of about three months until October 31 before a new licensing regime for imports of laptops, tablets, and personal computers comes into effect.

The government has issued a notification that import consignments can be cleared until October 31 without a license, and a government permit would be required for clearance of imports from November.

The import restrictions are also expected to affect technology companies such as Apple and Samsung, who are now expected to increase their investments in India.