What Display Daily thinks: The Indian government’s protectionism is coming at an opportune time because of the general dynamics of western trade with China. In other words, India can target China and it won’t seem like protectionism.
Well, it is. And, unfortunately, what we are seeing is entrenchment and blockade building by countries that once favored a more globalist view of trade.
It’s a phase. For India, it is an acceleration of policies to encourage more home grown electronics manufacturing. It is actually no more difficult for a foreign company to break into the Indian market with electronics than it is to do the same in China.
For the US, which is influencing any and all actions that directly impact China’s technology industries, the notion that manufacturing supply chains are being reshaped post-pandemic and diversified, removing any concentration of power, is a little ludicrous. Factories will go where labor is the cheapest, all other things being equal. You can guess where those places are.
In the meantime, India’s market is important but it is also a challenge with a nationalistic government that remains on the edge of being reactionary. The US elections are probably going to create a similar atmosphere locally which could mean more sanctions on China, and more drum beating for more aggressive tactics.
At some point, this quasi-cold trade war will have to stop. It won’t be in 2024, and depending on who sits in the White House, it may not be for a lot longer thereafter. That will give countries like India the room to do what they want to protect their markets from Chinese companies.
Reaching 1.4 Billion Consumers Just Got a Little Harder
India has implemented a new “import management system” to monitor shipments of electronics including laptops, tablets and personal computers. The online portal, which went into effect today, November 1, requires companies to register the quantity and value of imported products, according to Nikkei Asia.
The system represents a compromise from earlier plans to impose licensing requirements that faced opposition from industry and governments. India aims to boost domestic manufacturing and address cybersecurity concerns regarding hardware origins.
Under the new setup, import authorization will be issued electronically until September 2024. Authorities say automation will provide data to build trusted supply chains. In August, India had abruptly announced licensing restrictions but delayed implementation after objections from the U.S., China and industry.
The decision was seen as targeting China, which accounts for 59% of relevant imports. Singapore, Hong Kong and the US also have significant shares. Industry groups welcomed the new automated system as positive. Officials say next steps after 2024 will depend on data analysis.
While immediate trade tensions have eased, India may still impose licensing requirements later to support its Make in India manufacturing initiative. With 1.4 billion consumers, India is an attractive growth market for global electronics brands.
