India Government bans on compute devices imports favor domestic devices. The stated goal is to produce more personal devices in India. The desired benefits will be tested against the nuances of global production and competition.
India bans imports of compute devices without a license. Make In India will be helped by this ban. Consumers and computer buyers may not be happy with higher prices and less choice. Dynamic India’s high-tech global businesses may see harms without access to the latest devices and servers.
The expansion earlier this year of the Indian Government’s Production Linked Incentives with a target budget of Rs 170B (~USD$2.05B) is spread over a six-year period. The more immediate effect of the ban will be to limit (or delay) installations of large scale data centers, deployment of personal productivity devices, and limit choice for Indian consumers. This contrast is a Government choice to force a Buy for Make In India against pushing for more productive, or efficient, Indian services sector and leverage for Indian enterprises.
Enterprises may apply for authorization to perform imports (for example, for a mainframe installation). Not all products will soon be manufactured in India (mainframes, AI processors, DPUs). Availability of high end multi-chip module packaging, multi-module assemblies, and complex power supplies are examples of compute elements where limitations on finished goods may be difficult to directly determine impacts on Indian infrastructures. The efficiency of the Indian Government processing exception requests in a new structure are, as yet, unknown.
Looking at just employment it would seem any policy helping Make In India is preferred to effects measured by “might-be”. It is clear from policies addressed to smartphones and small personal devices that increases in production, protected by tariff policies, have caused employment in new factories in India. Growth in Make In India in these categories was cited in the creation of the new import bans.
Authoritative numbers are less available though estimates place India’s compute device markets at approximately USD$78.8 annual run rate (2Q2023) with USD$11-12B, not PC’s or tablets, with a substantial proportion imported. About 50% of personal devices are imported from China. The hope is this will work for an Indian market set to double or triple by 2026.
In this short series EkaLore will look at the likely results of the Indian Government ban policy.
For additional analysis and notes on a Dynamic India please see http://www.ekalore.com/india-business
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