The Centre’s decision to impose an import licence on IT hardware, including tablets and laptops, could impact sales during the upcoming season. This would further hurt IT hardware players as personal computing shipments have been depressed over the last few quarters.
Navkendar Singh, Associate Vice-President – Devices Research, IDC said: “The objective of the move is to push local manufacturing. However, our ecosystem isn’t ready for an assembly of this magnitude. Vendors ship in close to 2 million notebooks every quarter, with around three-fourths of this imported as completely built units (CBU). Also, almost the entire volume of premium notebooks are imported.”
“Moreover, the timing isn’t the best as the PC market has been struggling for the last two-three quarters, and this will further dampen market sentiment during the upcoming festival season,” he added.
Industry sources said while some players such as Dell manufacture laptops in India, a significant number of the laptops sold are imported. “Even if a company wants to shift to local manufacturing, it will need at least four to six months to get the ecosystem in place. It would have been better if the government had given time before implementing the import licence norms,” said an industry executive.
Faisal Kawoosa, Founder and Chief Analyst at techARC, said the government’s objective to curb imports to push local manufacturing may not be achieved because it can’t allow supplies of laptops to get affected. “Even if regulated, the import quantity cannot be compromised, and the government will have to approve/ allow requests to import from OEMs to meet domestic demand. We can’t afford to let supplies get hampered as that will affect businesses and productivity work across organisations. We are already seeing OEMs committed and working to increase their production locally in these product categories as well,” Kawoosa said.