Indian Economy News

According to Minister of State for Electronics and Information Technology (IT), Mr. Rajeev Chandrasekhar, the government aims to meet 70% of the country’s IT hardware requirement through local production in three years

  • IBEF
  • September 25, 2023

According to Mr. Rajeev Chandrasekhar, Minister of State for Electronics and Information Technology (IT), the government wants to lessen reliance on imports from dubious sources by producing up to 70% of the nation's IT hardware needs domestically over the next three years.

He further stated that currently, imports provide roughly 80% of the materials for the digital ecosystem. It is understood that the Indian portion of the supply chain will need to expand in order to emphasise trust. The goal is to increase that percentage to 65-70% over the next three years. Currently, 8-10% of the supply needed comes from India. As many as 40 companies, including Dell, HP, and Lenovo, have applied for the IT hardware Production Linked Incentive (PLI) scheme with a commitment to make personal computers, laptops, tablets, servers, and other equipment worth Rs. 4.65 lakh crore (US$ 56.07 billion) during the scheme period. If all companies get selected under the scheme, then the government will need to increase the incentive amount to Rs. 22,890 crore (US$ 2.76 billion) against the budgetary allocation of Rs. 17,000 crore (US$ 2.05 billion).

While industry players have lauded the government’s PLI scheme, there’s also a raised concern about abrupt restrictions for the import of IT hardware. Mr. Rajeev Chandrasekhar mentioned that there will be meetings with industry players to focus on draft rules on the proposed IT hardware import restriction. The aim is to address the high dependency on imports from sources that are not fully verified as trusted. The new rules to allow restricted imports of laptops, tablets, servers, etc. are proposed to be in place from November 1.

He also stated that with the expansion of the internet, people should only use servers and laptops from reputable manufacturers for our Indian cloud and data centers. It is evident that the Indian component of that supply chain will need to expand in order to emphasise trust.

US-based Information Technology Industry (ITI) President and Chief Executive Officer (CEO) Mr. Jason Oxman said that India is a leader in the field of technology policy and that, with the implementation of the Digital Personal Data Protection Act, it has accomplished a feat that only a select few other economies have managed. However, he mentioned that India must approach imports cautiously and understand that no one nation can produce everything domestically.

He further stated that without any formal stakeholder engagement, India hurriedly announced a new import restriction policy that would necessitate a new licensing framework for imports of tablets, laptops, and other electronic products. If adopted without significant adjustments, such policies will unduly hinder business and harm Indian consumers and companies, highlighting the value of giving the tech sector a seat at the table.

ITI is the representative of numerous multinational technology firms, including Apple, Dell, HP, IBM, Intel, Lenovo, Samsung, and others. Stakeholder consultation can help shape effective and appropriately targeted policies to advance India's objectives, facilitate foreign investment, and comply with international trade obligations and norms.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.