The system, as highlighted by the DGFT, is designed to facilitate the import process, with a quick turnaround time of about 10 minutes for the entire application process.
A notable aspect of this new mechanism is the absence of restrictions on the quantity, value, or country for import, indicating a more flexible approach for importers seeking authorization. However, the DGFT emphasized that companies listed under the “denied entity list” would not be eligible for import authorizations. These lists include firms that have defaulted on export obligations or have faced cases from the Directorate of Revenue Intelligence (DRI).
Furthermore, the system excludes companies interested in importing second-hand or refurbished items, as separate procedures apply to these imports. Although the new online system streamlines the application process, IT hardware products remain under the restricted category, as confirmed by a statement from DGFT official Sarangi.
Speaking at a media briefing, Secretary of the Ministry of Electronics and Information Technology, S Krishnan, emphasized that the primary goal of this initiative is to promote domestic manufacturing of electronic goods. He further added that the government aims to ensure a steady supply of electronic products within the country, which could potentially lead to a reduction in prices.
The authorities also clarified that import authorizations obtained through this system would remain valid until September 2024. Beyond this period, the government plans to review the data, engage with industry stakeholders, and determine future strategies.
Responding to concerns about the previously imposed import restrictions on IT hardware, the DGFT affirmed that the August notification would not be withdrawn. Instead, a clarification has been issued to implement the new online authorization system for these imports. Importers, as noted by Sarangi, will not be required to register with the DGFT to seek authorizations.
The DGFT also provided several exemptions for specific entities, including those operating within special economic zones and those involved in supplying to government agencies, undertakings, or defense purposes.
Moreover, the notification emphasized that activities such as re-packing, labelling, and refurbishing within special economic zones would not be considered as manufacturing for availing exemptions from import authorization.
The announcement has garnered mixed reactions from industry experts, with Pankaj Mohindroo, chairman of the Indian Cellular and Electronics Association (ICEA), acknowledging the move as a step towards fostering a robust domestic IT hardware manufacturing ecosystem. Mohindroo also indicated ongoing engagements with the government to strike a balance between domestic production, consumer interests, and the global supply chain.
With the new import authorization system in place, importers can expect a smoother process with improved transparency and efficiency. Additionally, the weekly video conference hosted by the DGFT serves as a platform for addressing stakeholder queries and concerns related to the new mechanism.
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