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US, China unclear on India’s computer import rules

India’s decision to implement an import management system for laptops, tablets and personal computers from November 1 2023, dropping an earlier reference to `licences’, has resulted in a spate of questions at the WTO with China, US, Taiwan and South Korea raising concerns on the “surprise announcements”, according to a Geneva-based trade official.

While India has distanced itself from the word ‘licences’, to avoid the needless “negative connotation” attached to the term, and officials have also announced that the import management system that will be implemented from next week will be non-restrictive to begin with, there have been calls for clarity from WTO members at a meeting of the WTO Committee on Market Access on Monday.

“The US, while welcoming the possible delay in imposition of import restrictions, warned that the sudden announcement of import licensing requirements without notice or seeking public comments could alienate US-based firms which could hesitate to do business with India,” a Geneva-based trade official said.

China, Taiwan and South Korea also asked India to provide more details on the import management system and a time-line, the official added.

The DGFT had issued a notification on August 3 this year imposing licencing conditions on imports of laptops, tablets, all-in-one PCs, and ultra-small form factor computers and servers applicable with immediate effect. Subsequently, the government decided to postpone implementation by about three months, till October 31, following protests from the industry.

The Commerce & Industry Ministry recently announced that the DGFT would operationalise an import management system for laptops and computers and would issue import authorisations to importers after they register on the site and state their requirements.

“Initially, import authorisation will be issued for whatever quantity the industry wants to import. However, at some point later, if the Ministry of Electronics and Information Technology wants to place some quota restrictions, it could be considered. There will be a need to scrutinise the total value of imports at that time,” another official said.

The validity of the import authorisation to be issued for laptop imports has also not been finalised yet. An authorisation usually remains valid for a year, but the DGFT and MeitY can together take a final call on the validity period, the official added.

The US representative pointed out that India had not provided any detailed information on the operational aspects of import requirements which led to uncertainty for exporters and downstream users, the Geneva-based trade official said.

While the US welcomed the possible delay in implementation of restrictive measures, it asked India to resend the requirements in light of their potential impact on trade and WTO requirements.

Referring to recent reports on India implementing an import registration management system instead of the import licensing requirement, China sought clarity. “It asked India to provide clarification about the rapid changing measures and the purpose of this policy,” the official pointed out.

South Korea stressed that the proposed measures by India seemed inconsistent with WTO rules and could consequently create unnecessary trade barriers. It requested India to reconsider the implementation of these measures and provide detailed clarifications and information on this issue, including its timeline.

MeitY had earlier said the process of monitoring imports would address India’s security concerns as IT hardware items, ran a risk of being bugged. A large part of the $7-8 billion of laptops, tablets, and computers imported annually into the country comes from China, which, too, could be monitored. The Hindu BusinessLine

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