Express View on restrictions on laptop imports: Licence raj dot com

Source: The post is based on the article “Express View on restrictions on laptop imports: Licence raj dot com” published in The Indian express on 5th August 2023.

Syllabus: GS2- Indian Economy and issues relating to planning, mobilisation of resources, growth, development and employment. & Effects of liberalisation on the economy,

News: The Indian government now requires licenses to import devices like laptops. This is like old restrictive policies. The aim is to boost local manufacturing and reduce imports, mainly from China. However, this can cause supply issues and higher prices. Recent policies show a return to past socialist approaches, which could harm economic progress made since the 1990s.

What are the benefits of imposing licenses to import devices like laptops?

Promote Domestic Manufacturing: The government aims to strengthen local industries and reduce dependency on imports.

Curb Chinese Imports: In 2022-23, personal computer imports stood at $5.3 billion, with China being the major contributor. Reducing these imports can balance trade.

Economic Strategy: By controlling imports, the government can influence the market, encouraging businesses to set up manufacturing units in India.

Job Creation: Boosting domestic manufacturing can lead to more jobs for the local population.

National Security: Reduced dependence on foreign tech may reduce potential cyber risks and protect sensitive data.

What are the limitations of imposing licenses to import devices like laptops?

Disruption: No prior warning to manufacturers can lead to sudden market disturbances.

Supply Shortages: Immediate licensing requirements can cause a lack of available products.

Price Surge: Limited supply often results in higher equipment prices for consumers.

Bureaucratic Hurdles: Licensing introduces more red tape, slowing down business operations, similar to pre-1991 era challenges.

Cost Disadvantages: Domestic manufacturing might not always be cost-effective, making products pricier.

Tech Ecosystem Impact: India’s IT services and startups, essential for “Digital India,” may suffer.

Regressive Approach: It reflects a return to older, restrictive policies, potentially hindering modern economic growth.

Global Trade Relations: Such policies might strain relations with trade partners like China.

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