Import licensing for e-devices wields neither carrot nor stick

livemint.com:

₹41,000 crore was earmarked for the sector over five years. At least 32 applicants were approved and local manufacturing continued its upward trajectory. A revised version of the programme is aimed at reprising that for computers.

The reason is sound: India imported about $10 billion of computing products last fiscal year, mostly from China. Much of India’s industrial policy now revolves around two overlapping goals: boosting local employment and economic activity, and reducing reliance on its big rival. Every smartphone, laptop or desktop PC made in India is a double-blow to China.

Whereas implementation of the first set of incentives was well-timed, at the height of Beijing-Washington tensions and just as global manufacturers sought to decouple from China, the second try looked troubled from the start. A report says major brands last year urged the government to delay it because the global sector was in a downturn. Still, the government went ahead.

Local media reported last week that while 44 companies had registered for PLI benefits, only two had actually applied, and the initial end-July deadline for applications was pushed ahead by a month. When the government announced its list of restricted items, the wording and timing was stark. The Directorate General of Foreign Trade specifically named those same items with more or less the same wording, and it did so less than a week after the PLI extension was made.

Policy hiccups are common. Schemes designed to spur production or investment don’t always work as planned, and interest often lags expectation. Given the global macroeconomic situation and even mighty India’s inability to avert the fallout, it’s understandable that manufacturers are not keen to increase spending