Indian Govt : Set to embark on a mission to reduce its dependence on Chinese imports for IT hardware components. Citing concerns over supply chain vulnerabilities and national security, the Indian Govt is poised to enforce stringent measures to limit imports from China and encourage domestic production. This move aligns with the “trust sources” norms and aims to catalyze a surge in local sourcing of components for laptops and servers, estimated to reach a staggering $20 billion within the next four years, a remarkable increase from the current $1 billion figure.
According to sources, the intention of the Indian Govt is clear: prioritize trusted sourcing and trusted locations over heavy reliance on imports, particularly from China. The move also reflects a broader strategy to stimulate the “Make in India” initiative, promoting local manufacturing and reducing dependence on foreign imports.
“The government is certainly not happy with the heavy dependence on China and does not find the current ecosystem of component sourcing healthy,” stated one of the sources quoted in the report.
This initiative is further reinforced by the implementation of a Rs 17,000 crore production-linked incentive (PLI) scheme for IT hardware and the forthcoming introduction of an “import management system” scheduled to commence on November 1.
These actions underscore the government’s unwavering commitment to creating a robust ecosystem for device and server manufacturing within India, akin to the successful model employed in smartphone manufacturing.
Indian Govt & China
India currently relies on China for approximately 10 per cent of its IT hardware supply chain, within an industry estimated to be worth $8-10 billion. However, this over-dependence on a single country for critical components has raised concerns not only about the resilience of supply chains but also about national security.
Last month, in a bid to bolster domestic manufacturing, the Indian Govt implemented import restrictions on laptops, tablets, all-in-one personal computers, ultra-small form factor computers, and servers, effective immediately.
The Directorate General of Foreign Trade (DGFT) issued a notification, stating that exemptions from import licensing would be provided for specific purposes such as R&D, testing, benchmarking, evaluation, repair and return, and product development. The move marked these IT hardware items as “Restricted” for import.
The DGFT, an arm of the Commerce and industry ministry in India, plays a pivotal role in overseeing exports and imports, and this decision underscores the commitment of the Indian Govt to creating a self-reliant IT hardware manufacturing industry.
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