Editorial: A welcome climbdown

It is a matter of relief that the government chose not to press ahead with its earlier policy of bringing back the licence regime

In this time and age marked by globalised market dynamics, imposing a licence regime is a flawed path to pursue for meeting any policy objectives, however well-meaning they may be. The NDA government’s sudden decision in August to impose restrictions and licensing requirements on the import of laptops, tablets and other devices was one such misguided move. Though the avowed objective of this policy was to curb imports from China and to provide a fillip to domestic manufacturing, it was reminiscent of the repressive Licence-Permit regime of the past. Facing widespread criticism, the Centre has made a climbdown on the matter. It is a welcome development which will go a long way in protecting the interests of the consumers. The government has now rolled out a new import management system for IT hardware, which includes laptops and computers. Under this, companies will only have to register and reveal data that relates to their imports, and the country of origin. The new system will help monitor imports and ensure that items come from trusted sources and it will be faceless and contactless, ensuring a hassle-free experience for importers. However, companies in the “denied entity list” will not receive authorisation for imports. It is a matter of relief that the government chose not to press ahead with its earlier policy of bringing back the licence regime. This was not the first time that such a regressive idea came from the government. A proposal to bring credit card spending outside the country under the liberalised remittance scheme had triggered concerns over the state machinery’s overreach in every aspect of the economy.

A throwback to the Licence Raj would lead to delays in the simultaneous release of new PC and laptop models in Indian marketplaces, putting the consumers at a great disadvantage. It would be a major challenge to quickly scale up manufacturing to meet the ever-rising domestic demand, with laptops and tablets being heavily used in the education, business and entertainment sectors. A more prudent approach would involve creating a more conducive environment for development of a strong and vibrant manufacturing ecosystem. The policy framework must be geared towards ensuring greater openness and more freedom to operate. It must be pointed out that the Centre has already put in place a production-linked incentive scheme for IT hardware. Several firms, both contract manufacturers and original equipment manufacturers, have applied under the scheme, cleared by the union Cabinet earlier this year. In a bid to attract big-ticket investments, the deadline for companies to apply for this scheme has been extended. All-out efforts are needed to lure international players to establish manufacturing facilities in India. Instead of a knee-jerk reaction like imposition of ban on imports, the government must adopt policies that help the country emerge as a global manufacturing hub.

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