Centre bans laptop imports two days before the launch of JioBook: Deja Vu for Jio competitors

On August 3rd, 2023, the Modi Government announced it would curtail all laptop imports in India. It clarified that to boost the Indian local market and enable local tech tycoons to compete with their global counterparts, we had to do away with foreign-built laptops.

The disgruntled netizens deduced the chronology behind the move, arguing that it was merely a strategic ploy for the Modi government to facilitate the country’s domineering business tycoon Mukesh Ambani and his company Jio. 

On July 31st, Jio, one of Ambanis’ most ambitious projects, announced that it would launch an economical laptop, the JioBook, to facilitate Indian students to learn via online classes, learn coding, access Yoga Studio, and partake in online trading through a simple, feasible and cost-effective tool. 

The government placed an outright ban on other foreign laptops (competitors of the JioBook) only two days before the commercial launch of the JioBook: Is it a mere coincidence? 

For many, this move by the Modi government offers a deja vu as the government had similarly endorsed the ‘Jio sim’ at the cost of sacrificing the Bharat Sanchar Nigam Limited (BSNL) and its numerous private competitors.

What is the ban?

On August 3rd, the Modi government took to curtailing the import of laptops, tablets, all-in-one personal computers and ultra-small computers and servers with immediate effect. Any company that wanted to bring foreign-made laptops for sale in India’s domestic market had to seek a permit or a license from the government for their inbound shipment.

The notification issued by the Directorate General of Foreign Trade (DGFT) put restrictions under the Harmonised System of Nomenclature (HSN) Code 8471 on seven categories of electronic gadgets. HSN 8471 get used to identifying devices that can perform data processing tasks.

After the announcement on August 3rd, severe concerns regarding market instability and technical and practical fault lines prompted the Government to ease the restriction. Since then, the Government has kept issuing gazetted notifications to send the buyers into a frenzy. 

The conditions of the ban remain ambiguous as the issue of an ‘outright ban’ got replaced by ‘some restrictions’ during a transitional period until November 1st, 2023.

What reasons has the government cited? 

One of the main reasons cited by the Modi government behind this impromptu ban is the reliance (no pun intended) of India’s domestic market on foreign-built devices. 

Thus, this notification plans to serve as an impetus for Indian manufacturers to grasp the opportunity where electronics imports, including laptops, tablets, and personal computers, had accounted for USD 19.7 billion between April and June 2023, rising at 6% per year.

Another reason cited is the government’s plan to reduce dependence on China. The marquee players in India’s laptop market, Hewlett-Packard, Dell, Acer, Samsung, LG, Apple and Lenovo, have a substantial proportion of their products imported directly from China. In 2022-23, 75% of all laptop imports in India got accrued from China, a burden of USD 5.3 billion.

Citing safeguard against its geopolitical adversary, the Modi Government announced that it would allow the operation of only those devices that catered to India’s ‘safety norms.’

However, the catch remains that while a company operating in India will not be allowed to import ‘ready-made’ laptops from China, it can import all parts from China and assemble them in India. We are unsure how these will adhere to the government’s security concerns.

Where does the Jiobook fit in all this?

On July 31st, when Mukesh Ambani launched the JioBook, which gets distinguished for its economical cost of just INR 16,499, it failed to create a dent in the market owing to its sub-optimal specifications and ambiguous reviews. However, it was only when the government decided to ban foreign-built laptops that the JioBook received its free publicity.

While the Modi government refuses to rub shoulders with China, and the laptop ban appears to be an effort in the same direction, the ‘indigenous’ JioBook will be manufactured in China and assembled in India. Hence, the prospect of how the Ambanis will encash it under ‘nationalism’ and ‘swadeshi’ remains equivocal. 

The JioBook operates through an Android-based operating system that renders it cost-effective, but its users get deprived of a competitive edge against Microsoft Windows users. At this juncture, the motive behind Mukesh Ambani’s ‘philanthropy’ looks murky, to say the least.

The monopolising trend in the Indian market:

Corporates and politics in India are cheek by jowl. However, the monopolising tendencies of a handful of conglomerates in the Indian market across various sectors are too apparent to ignore.

Before the launching of JioBook, when Mukesh Ambani launched the Jio sim, numerous allegations of the Modi government leashing out publicly funded BSNL infrastructure at negligible rates to the Jio took the nation by storm.