India on Thursday announced that it was immediately stopping the import of all laptops and personal computers in India unless the company bringing these gadgets into the country gets a special licence. The move is set to increase the prices of laptops, including Apple MacBook, in India.

The Indian government has put an immediate import restriction on laptops and personal computers.

India on Thursday announced an immediate import restriction for laptops and personal computers, noting that any entity or company planning to bring laptops and computers for sale in India will have to apply for and obtain a "Valid Licence for Restricted Imports".

The sudden move means that companies like Apple, which sells MacBooks as well as Mac mini and other computers, will have to immediately stop importing these gadgets in India. The same rules also apply to companies like Lenovo, HP, Asus, Acer, Samsung and others that too sell laptops and personal computers in India after importing them from abroad.

Most of the laptops and personal computers sold in India are manufactured or assembled in China, and with this new rule the government might be hoping to shift some of this manufacturing and assembling to India. This is similar to what the country has achieved with smartphone manufacturing. The directive on import restrictions for laptops was issued on Thursday morning by the Directorate General of Foreign Trade.

The notice said, "Import of Laptops, Tablets, All-in-one Personal Computers, and Ultra small form factor Computers and Servers falling under HSN 8741 shall be 'Restricted' and their import would be allowed against a valid Licence for Restricted Imports."

Although, in the short term — or at least until companies apply for and obtain special permits to bring laptops into India — the import restriction is likely to lead to an increase in the prices of laptops, computers, MacBooks, and Mac Minis in the Indian market.

The move may also help companies like Reliance, which launched JioBook just two days ago, and other Indian companies. Although these companies are likely to import their laptops from China, the move is still likely to help them because local companies may find it easier to get the import exemption license.

Apple MacBook, Lenovo laptop prices to increase?

While the implication of the import restriction on laptops will be clear in the coming days, it is safe to say that the prices of the current laptops that are out in the market will increase. This is because, in the short run, the import restriction is bound to create a scarcity in the market. In other words, there will be higher demand and less supply.

"With the total Laptop/PC market size close to 8 Billion dollars annually and approximately 65 percent of units being imported, the government's move is aimed at promoting domestic production and reducing dependence on imports. The industry comprises around 12 million units, and this restriction may lead to some short-term supply disruptions, especially for brands like Apple, HP, and Lenovo," Counterpoint's Research Director, Tarun Pathak, told India Today.

"However, it is worth noting that the government's strategy aligns with their recent announcement to extend the application window under the PLI Scheme 2.0 for IT Hardware, offering better incentives to encourage local manufacturing. India has made remarkable progress in achieving almost 100% local manufacturing for smartphones and TVs, but the IT hardware segment has lagged behind, with only 30-35% of products currently being Made in India. This move signals a strong push to bridge that gap and enhance the local production of laptops, tablets, and personal computers," he added.

Even if companies like Apple and Lenovo do not change the prices of the existing laptops that are already in the Indian market, the import restriction is likely to impact the sales and discounts that retailers and companies offer from time to time. With demand being higher than supply, the retailers may have no incentive to offer any discounts on the laptops.

Although in the long-term — if and when companies like Apple and Lenovo start local manufacturing or assembling — the prices of laptops and computers in India may come down again. It is worth noting that India has announced import restrictions only on finished laptops and computers. The parts of these machines can still be imported freely.

Given the price increase in the computers — import of servers too has been restricted — companies operating in India may also see an increase in their IT infrastructure budget.

Some exceptions

The new notice issued by the Directorate General of Foreign Trade does allow for exceptions. These are:

— It’s important to note that imports under Baggage rules for these items are not affected by these restrictions. In other words, people can bring laptops etc from abroad for their personal use.

— Additionally, the restriction on import licensing is waived for quantities of up to 20 pieces per consignment for specific purposes such as research and development, testing, benchmarking, and repair.