Japan and China have formally raised concern over India’s laptop import licensing measure which was announced in August last year but was soon reversed, a statement released by World Trade Organization’s (WTO’s) Committee on Import Licensing (CIL) that met on May 21 showed.
India’s move to restrict laptop imports had earlier too gathered attention particularly from the US as United States Trade Representative (USTR) Ambassador Katherine Tai raised the issue during the G20 meet in India. Tai had urged India to ensure that the end-to-end online system currently in operation and related policies do not restrict trade going forward.
However, a senior government official told The Indian Express that questions raised by countries have no merit since there is no restriction on laptop and tablet imports in the country. He said that since India is a large market for laptops, countries keep raising questions in committee meetings. “There are far more important concerns that global trade is impacted by such as the Carbon Border Adjustment Mechanism (CBAM) and Inflation Reduction Act (IRA) launched by the European Union and US but there is no movement on that front in the WTO. But India is being questioned for a policy that is imposing no restriction on laptop imports at all,” the official stated.
This came as the regime could have impacted the exports of laptops and tablets manufactured by American companies in China as nearly 90 per cent of the laptops and personal computers (PCs) imported by India came from China. However, other countries that eye fast growing domestic market for laptops are increasingly questioning any move made by India that resembles a restriction.
Notably, the WTO licensing committee had gathered last week to discuss ways to improve the transparency of import licensing regimes among WTO members and to encourage members to make use of the WTO’s Import Licensing Notification Portal launched on October 31 last year.
The committee addressed three trade concerns in relation to India during the meeting, the statement said. While China and Japan raised concern over India’s measures on personal computers, tablets and other electronic products, Indonesia questioned India’s import monitoring on viscose staple fiber (VSF). Chinese Taipei and Thailand sought to discuss India’s import monitoring for pneumatic tyres. Earlier, India in its reply to the questions raised by the US in the WTO said that the present system has been put in place to “manage and monitor import” of specified IT hardware Goods to ensure supply chain resilience and address national security concerns.
New Delhi in its reply on December 12 last year also said that the issuance of license will be “automatic in nature” and that India has no plans to expand the use of import management system beyond the listed products as of date.
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India had come up with the regime to limit import of laptop and tablets largely to cut reliance on China which is the largest exporter of the item. However, unlike in the case of mobile phones, a WTO commitment prevents India from raising tariffs to shore up manufacturing within the country.
As per the commitment made under the Information Technology Agreement in 1997 at the WTO, India cannot increase the duty on laptops, PCs and similar IT products, which currently come into the country at zero duty.Limiting laptops import is also crucial for India since the production-linked incentive (PLI) scheme for IT hardware goods is 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.
Last year the US, China, Korea and Chinese Taipei raised concerns about India’s decision to impose import restrictions on laptops, and computers, in another WTO committee. During the meeting of WTO’s Committee on Market Access, PTI reported that Korea stressed that the proposed measures by India seem inconsistent with WTO rules and could consequently create unnecessary trade barriers.
