Govt Extends Import Management System (IMS) for Electronic Devices

What’s in today’s article?

• Why in the News?
• Background
• About Import Management System
• Reasons Behind the Introduction of Import Management System
• News Summary

Why in the News?

• The Union government is expected to extend the existing import management system for imports of certain IT hardware products including laptops and tablets for three months.

Background

• In November 2023, the Union Government had imposed restrictions on import of laptops, tablets, all-in-one personal computers and ultra-small computers and servers with immediate effect.
• Subsequently, the government conducted consultations on a new system through which it aimed to monitor the sources from which IT hardware is being imported.
• The government eventually introduced the Import Management System for certain category of electronic goods.

About Import Management System

• The Import Management System (IMS) of the Indian Government is a framework designed to streamline and regulate the import of goods into India.
• Managed primarily by the Directorate General of Foreign Trade (DGFT), IMS aims to facilitate efficient import processes, ensure compliance with various regulations, and maintain the quality and safety of imported products.
• Objectives of IMS:
  • To protect domestic industries by regulating the inflow of goods that could negatively impact local markets.
  • To safeguard public health, safety, and the environment by controlling the import of hazardous or substandard products.
  • To ensure that all imports comply with Indian laws and standards, maintaining the quality of goods entering the country.
  • To enhance ease of doing business by providing a transparent and streamlined process for importers.
• Key Features of IMS:
  • Regulation and Control: IMS helps in monitoring and regulating the import of goods by enforcing import policies, including restrictions, quotas, and licensing requirements for specific items.
  • Licensing and Permits: Importers must obtain licenses or permits for restricted items through the IMS. This helps in controlling the entry of sensitive goods that could impact national security, health, or the environment.
  • Documentation and Compliance: IMS facilitates the submission of required documents such as import licenses, bills of entry, and certificates of origin. It ensures that all imported goods comply with Indian standards and regulations.
  • Risk Management: The system uses risk management tools to identify and screen high-risk consignments, ensuring that prohibited or substandard goods do not enter the country.
  • Tariff and Non-Tariff Measures: IMS enforces both tariff and non-tariff measures to regulate imports, such as import duties, anti-dumping duties, and sanitary and phytosanitary standards, which protect domestic industries and consumers.
  • Facilitation of Trade: By providing guidelines and assistance to importers, IMS aims to make the import process more efficient, reducing the time and cost associated with bringing goods into India.

Reasons Behind the Introduction of Import Management System

• China Factor:
  • Data released by the Ministry of Commerce and Industry gives us a broad picture of India’s dependence on China with regard to the import of electronic goods such as laptops, computers etc.
  • Indeed, India’s imports of the aforementioned class of electronic goods have been steadily rising.
  • Whereas in 2019-20, India’s imports of electronic goods stood at $5.3 billion, that figure climbed to $10.3 billion in 2021-22, before declining slightly to hit $8.7 billion in 2022-23.
  • Given this fact, a rise in indigenous manufacturing would not only help India reduce its dependence on its diplomatic and business rival but would also help indigenous manufacturers expand their footprint globally.
  • The introduction of Import Management System could force IT hardware companies to establish new supply chains, as China is unlikely to be classified as a trusted geography.
• Security Factor:
  • Another factor behind the restrictions imposed on this class of electronic goods is concerns about ‘security’.
  • The restrictions may have been brought in to guard against electronic hardware coming in with “in-built security loopholes that may potentially endanger sensitive personal and enterprise data”.
  • Across the world, many red flags have been raised about cybersecurity with regard to Chinese-manufactured electronics.

News Summary

• The Union government is expected to extend the existing import management system for IT hardware products, including laptops and tablets, by three months, with the current review deadline set for September 30, an official source said.
• The system monitors imports of laptops, personal computers, and other IT hardware without disrupting market supply.
• Imports of these items stood at $8.4 billion in 2023-24, mainly from China, against an authorisation limit of about $9.5 billion.
• The authorisation allows importers to apply for multiple permissions, valid until September 30, 2024. Over 100 applications, including those from Apple, Dell, and Lenovo, were approved on the system’s first day, allowing imports worth nearly $10 billion.
• The extension would cover the entire current year, preventing any disruption, according to the official.

Q1. What is meant by Custom Duty?

Customs duty refers to the tax imposed on goods when they are transported across international borders. In simple terms, it is the tax that is levied on import and export of goods. The government uses this duty to raise its revenues, safeguard domestic industries, and regulate movement of goods.

Q2. What is meant by Anti Dumping Duty?

Anti-dumping duties are taxes imposed on imported goods in order to compensate for the difference between their export price and their normal value, if dumping causes injury to producers of competing products in the importing country.

Source: Govt. may extend import management system for laptops, tablets for 3 months

Business Standard