Hardware protectionism | When licence controls hurt

The government wants to boost domestic manufacturing of IT hardware by imposing curbs on imports of laptops, personal computers and servers, but experts caution against a return of the licence-permit regime

MARKET MATTERS Laptops on display at a Reliance Digital store in Delhi’s Janakpuri. (Photograph by Rajwant Rawat)

The Union government’s decision last month to restrict the import of laptops and computers has led to a lot of conster­nation in industry circles. While the government justifies the move that mandates a licence for importers—to be implemented from November 1—as one that will encourage domestic production of laptops and computers, there is widespread concern that the decision negates the fruits of liberalisation set off three deca­des ago. Some experts also view this as a return of the ‘licence-permit’ raj. They fear more products across a wider range coming under import controls, what they call a ‘protectionist’ approach that runs contrary to the foundational principles of the World Trade Organization (WTO).