Balancing Protection and Progress: Electronics Industry Faces Hurdles from New Import Rules

India's latest attempt to protect its markets against cheap and low-quality imports—particularly from China—has accidentally hit its own electronics manufacturing industry. The government's broad Quality Control Orders (QCOs) now extend to a variety of base metals such as aluminium, steel, and copper, as well as some high-precision metals and polymers essential in electronics manufacturing. While the aim is to halt dumping and safeguard consumers, these blanket bans are causing fresh supply chain pains for Electronics Inc.

 

Key Highlights:

 

Production of electronics depends on high-grade, specialty raw materials and components, which India does not manufacture at mass levels. The QCOs, though beneficial to low-precision industries, are strangling the import of critical inputs for high-tech electronics, threatening production slumps and export competitiveness.

 

Industry captains caution that sweeping QCOs undermine international supply chains, which stretch across China, Japan, South Korea, and other territories. Inputs brought under QCOs are imported only in small quantities but are critical to comply with international quality standards.

 

India Cellular and Electronics Association (ICEA) has also appealed to the government to free electronics inputs from QCOs, citing a threat of an input shortage-led manufacturing stoppage, which will derail production schedules and thwart global value chain integration by India.

 

The problem is especially critical for firms availing themselves of the Production Linked Incentive (PLI) scheme, since they rely on such specialized imports to ensure product quality and fulfill export obligations.

 

Industry leaders point out that electronics products are already undergoing stringent testing under the Compulsory Registration Order (CRO) scheme, and additional curbs on raw materials are unnecessary and injurious.

 

As India intends to develop into a global electronics hub, policymakers have to walk a tightrope between sheltering domestic markets and maintaining high-tech production expansion.

 

Source: Economic Times, Navbharat Times