PC imports rose amid licence uncertainty, China’s share spiked after plan scrapped

• In January, nearly 90 per cent of the laptops and personal computers (PCs) imported by India came from China. In the month before that, Beijing’s share was well over 89 per cent and, in November, the figure was 83 per cent. In all, until January in the 2023-24 financial year (FY), nearly eight out of 10 laptops sold in India came from China.
• This rising trend came despite New Delhi’s attempts to discourage laptop and PC imports from China. These efforts included a short-lived notification by the Directorate General of Foreign Trade (DGFT) in August 2023, which placed the import of these goods under the restricted category, and the government sweetening its IT hardware manufacturing incentive policy to kickstart domestic production.
• And yet, India’s total laptop imports went up 5 per cent year-on-year in FY24 (until January), while such imports from China increased 6 per cent. In quantitative terms, China exported 64.93 lakh units to India in FY24 compared to 61.24 lakh units in FY23. January is the latest month for which the data for this category (HSN: 84713010) is available with the ministry.

• The data shows that the immediate reaction by companies to the DGFT licence restriction, and the almost immediate postponement of the plan till October 31, was to quickly stock up on inventory. And after October, when the government revoked the import licence plan, total imports fell amid high stocks — but China’s share in the overall pie grew considerably.

• In December, India imported around 5.2 lakh laptops (worth around $276 million) and China commanded a lion’s share of these at 89 per cent, or 4.67 lakh units. In January, China’s share grew even further: India imported 6.9 lakh laptops of which 6.2 lakh, roughly 90 per cent, came from China.
• While it is worth noting that FY23, too, saw a somewhat similar decline in imports in November, December and January, the quantity of imports in September and October, the pre-Diwali months, was much higher in FY24.
• China’s share was 92 per cent, in January 2023 as well, but that was not preceded by government efforts to discourage Chinese imports.
• The trend comes at a time the government’s production-linked incentive (PLI) scheme for IT hardware is understood to be moving in the slow lane, despite the Union Information Technology Ministry modifying the plan to increase budgetary outlay last May, and clearing 27 entities, including Acer, Asus, Dell, HP and Lenovo, under the scheme.