Import licensing a pragmatic step amidst new realities of global trade
semiconductors, from this month. Trade tensions between China and the US don’t look like easing any time soon despite the Biden administration’s overtures to Beijing, including visits to China by top US officials such as Yellen. This has inescapable consequences for global trade.
The world depends on China for many supplies, including strategic ones, but is desperate to reduce this dependence. This has thrown the global economic order into flux, and it’s not yet clear what the new equilibrium will look like. Seen against this backdrop, India’s new licence requirements for laptop imports are in sync with the emerging global economic order – one in which large economies use trade restrictions in what has been dubbed the ‘Tech Cold War’.
This marked a hiatus – if not a reversal – of the free-trade approach that accelerated globalisation and boosted global GDP growth by giving consumers access to cheaper and better-quality products. It’s not clear yet if that world will return any time soon. Most countries are now driven by the need to build strategic advantages to minimise their vulnerabilities, thanks to the chip shortages that followed the pandemic, and the disrupted food, fertiliser and fuel supplies that followed Russia’s invasion of Ukraine.
No economy wants to be heavily dependent on China, Russia or any other country. Most rich countries are spending considerable sums to build this self-reliance, especially in crucial technologies such as semiconductor manufacturing, which suggests there could be long-lasting changes in the way global trade is conducted. Laptops are hardly a strategic industry, and the troubles with licensing are well-known.
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