NEW DELHI : India will introduce an import management system to permit the import of laptops, servers and other IT hardware products from trusted jurisdictions, Rajeev Chandrasekhar, minister of electronics and IT, said. Imports from non-trusted jurisdictions—read China—will be limited to a certain number of units. The framework, expected to be put in place this month, aims to exit the ‘non-sustainable’ model of relying on imports, the minister said in an interview. Edited excerpts:
What has the government communicated to companies importing IT hardware products?
IT hardware—the broader server and laptop market—is increasingly powering the growth of digitization of our economy, Internet and cloud in India. Currently, it is extraordinarily dependent on supply chains that are import-intensive, and within that, it is extraordinarily dependent on one geography. That is not a sustainable model for the Indian government. So, we’ve said two changes we need to see to the broader supply chain; there has to be a larger domestic component of it, and if there is an import component, it has to be from a trusted source. We want to build trust into the DNA of all policymaking of the underlying internet, and the digital ecosystem that sits on it. We don’t want to face the problems that countries in the West are today facing, having invested in equipment from certain countries and now to pull back. The cloud in India is going to be 25-30 times what it is today in the next two to three years. There will be huge demand for data centres and servers. We are saying do more domestic sourcing of that supply chain and if you do it, also make sure that we will scrutinize where you’re bringing it from. So, to address both these goals we will put an import management system, which also has a third goal, of not disrupting any transition from the current model. We want to make it orderly.
When will it be implemented? What time frame will be given to companies for transition?
It should come up by middle of this month. (On transition period) It will not be two months for sure, and will not be 12 months. If you import from geographies that are not fully trusted by us, then we will say subject to you pivoting and transitioning to a much more trusted supply chain, we will give you a certain amount of time, where you can get a certain amount of material from that particular geography, which is much better than saying nothing (from that geography). There is certainly going to be an incentive to the PLI (production-linked incentive) IT hardware scheme for companies to diversify their supply chain and create more domestic sourcing of their equipment and supplies. Wherever we think that they are extraordinarily concentrated in geographies that are not trusted, they will have to find some other way of manufacturing.
The concern may be that government will put quotas in case of imports.
If a company says that I want to import from a particular jurisdiction, which we may not be fully comfortable with, then of course we will say that you can only import so many pieces, you can’t import for the next 10 years from it. That will be interpreted as a quota, but it is what it is.
What is the status of the Digital India Act?
It is ready. It is going through the internal process of the government, including the legal department, before it goes for consultation. I wanted to start the consultation in the second week of September. I think give or take one or two days, it will go into consultation.
What kind of interest has the government received from Indian companies such as Reliance, Tatas, etc., in the semiconductor space?
RIL, as in Jio, has interest in semiconductors, as they must because they’re in that space. Tatas have a deep interest which they have reiterated, in semiconductors and electronics, as they must. But it is not enough for them to have interest, they have to have a partner that is the source of the technology in case of a fab or packaging. I will tell you that a lot of Indian companies are interested. They are looking to the government for direction and guidance which we have given them.
We’re helping them (on the technology), and we’re also asking them the products that they will build.
Foxconn is learnt to have tied up with STMicro. Have they submitted a proposal?
I don’t want to confirm that. They have certainly told us that they have access to credible, industry grade, legacy node technology. We have not asked them where that is from yet, because they have yet to submit a formal proposal. As you know, all the proposals will go to the same scrutiny by the Technology Advisory Group.
There’s preparation on for Semicon India 2024.
By next September, when the third edition of Semicon India comes around, we would have launched SCL modernization and Bharat Semiconductor Research Center, which can be the two linchpins of research. The Micron project would have substantially developed. We’re reasonably confident that we would have also got a couple of fab proposals minimum approved. Also, Semicon India will be global as SEMI will organize it in Taiwan, Europe, the West and Japan.
India as a repository for DPIs under G20 - What is the plan? How will it be financed?
India will manage the global DPI repository. It will be an online repository, where DPIs will be available. and we’ll figure out whether it will be open or curated. The One Future Alliance will finance it, we are working it out. It will be a combination of multilateral agencies, NGOs like Bill and Melinda Gates Foundation that has shown interest, private companies and government funding. That’s the broad thinking at this stage.
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