View: India’s PC import restrictions smell like desperation

economictimes.indiatimes.com:

The government’s Aug. 3 announcement means businesses will need an import license to bring items like laptops into the country — a sign that earlier incentives designed to increase domestic production had failed to gain traction. Specifically, a 169 billion rupee ($2 billion) plan to hand cash back to makers of computer equipment doesn’t seem to be garnering the levels of interest received for an earlier policy aimed at smartphone makers.

Impetus for this sudden restriction and concession may date back to the government’s decision last year to implement the second incarnation of its production-linked incentive scheme. Introduced in 2020, it was part of Prime Minister Narendra Modi’s efforts to encourage increased manufacturing of goods ranging from chemicals and textiles to white goods and cars by giving cash back to companies based on how much their revenue grew. One upside to this approach is that the government only pays for positive outcomes: if investment doesn’t increase and local production doesn’t rise then no money is dished out.

The smartphone sector was a major beneficiary; businesses were offered a starting incentive of 6% of net incremental sales and 410 billion rupees was earmarked for the sector over five years. At least 32 applicants were approved and local manufacturing continued its upward trajectory, climbing 27% last fiscal year to 3.5 billion rupees. This second version of the program is aimed at reprising that accomplishment for computers.