Amendment In Import Policy of Items Under HSN 8471

On August 3rd, 2023, a notification has been released for India's import policy by the Directorate General of Foreign Trade. The change is implemented on import of items such as personal computers, tablets, laptops and small computers which are falling under the HSN 8471. A valid license is required to import these restricted items.

The businesses and individuals will get impacted with the change in the import policy. Some exemptions are provided in the policy which are mentioned below with a complete evaluation of other changes.

What are the New Amendments in the Policy?

The following are the new amendments of DGFT import policy:

Restriction of Imports: The import of specific digital devices are now restricted under HSN 8471 and can only be imported when you have a valid license for restricted imports. The restricted items are personal computers, micro computers, automatic data processing machines, etc.

Exemptions on Products: There are some exemptions outlined in DGFT and it includes:

One personal computer, laptop, tablet or small computer can be imported without an import license. But you have to pay the import taxes.

In a single shipment you can import 20 of these items without an import license. The purpose of the import can be research, testing, fixing, creating new product, etc. Here the condition is that you can only use them only for these purposes and do not sell them. Once your work or purpose get done, destroy the product or simply send them back.

Capital Goods: If you really need these products for creation of a bigger machine, then you don’t need an import license.

Repairing Items: If these items are fixed abroad and then bring back to the country, then you don’t need an import license. 

The immediate effect of these items will be on import of laptops, tablets, personal computers and small computers (like servers). These products are restricted under a certain code now. Only in the conditions mentioned above, you can import these items. This change is implemented by a Bureau of Indian Standards and approved by the Ministry of Commerce & Industry.

Unclear Aspects of Import Policy?

The import policy has leaves a room for ambiguity and several questions, and these are as follows:

SEZ/FTZ to DTA/EOU/STPI Clearances: In the notification it is unclear that license requirement applies to clearance from an SEZ/FTZ into a DTA/EOU/STPI unit. 

Determination of Essential Items: The notification has mentioned that import license is not required if the items is essential part of a Capital Good. But how the essentiality of the item will be determined is unclear in the notification.

Single Item Import: For import of a single item, the need of license is not clear. In the notification it has been mentioned that the license is applicable in case of more than one unit. So, all these point are creating confusion and clearance is required to obtain an import license or not.

Items Revised Under CTH 8471

Under the policy, the following items are revised in CTH 8471 and the items are as follows:

1. Personal Computer
2. Micro Computer
3. Large or main frame computer
4. Other automatic data processing machines: presented in the form of systems.
5. Processing unit other than those of subheading 8471.41 or 8471.49 whether or not containing in the same housing one or two of the following types of units.
6. Storage units, input units and output units.

How the Import Policy will Effect the Manufacturing Industry?

As per the latest update the, liberal transitional arrangements are provided for import of Laptops, Tablets, All-in-one Personal Computers, Ultra small for factor computers and servers falling under HSN 8471 till 31st October, 2023.

By implementing the restriction on imports of electronic items will push the manufacturing market of India. This will push Indian manufacturers to fill the gap and increase the electronic market. In 2022, the size of the Indian electronic market was USD 73.73 billion in 2022 and it is expected to grow by 6.8% from 2023 to 2030.

The small and medium manufacturing businesses have an opportunity to grow. Also a benefit of production-linked incentives will be provided to businesses included in the electronic sector. 

Indian Government has increased a deadline to submit an application to get the benefit of Rs. 17000 crore for IT hardware which covers the laptop, tablets, server, personal computer. The last date to apply for the scheme is August 30th, 2023.

So, to lead the global electronics supply chain, this incentive scheme has been implemented by the government with a target to achieve the annual production worth USD 300 billion by 2026. Some big players in the laptop market are Dell, Acer, Lenovo and their major portion of import came from China. To cater the complete import portion, the DGFT import policy has been implemented.

Conclusion

To conclude, the notification is issued to boost the Make in India initiative. But there are some unclear doubts to people, if the DGFT will clear all the doubts and bring a smoother transition to the new import policy for businesses. Also maintain the momentum in the Indian economy then the manufacturing industry of India will become a leading market globally.

Author: Dushyant Sharma

Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.