Indian Notebook Manufacturers Crisis: India’s notebook manufacturing sector is facing a serious economic crisis. Local small and medium enterprises (MSMEs) are on the brink of collapse due to the influx of cheap and tax-free notebooks from Southeast Asian countries (ASEAN). To save the manufacturers of the country from this situation, the All India Notebook Manufacturers Association has demanded an immediate intervention before the Union Ministry of Commerce. If proper steps are not taken by the government, many factories in the country are feared to be closed permanently.

Demand for implementation of “Minimum Import Price” before Commerce Ministry

The association has written a letter to the Ministry of Commerce to protect the interests of local industries. The letter expressly demanded immediate imposition of a “Minimum Import Price” (MIP) on notebooks imported from abroad. Manufacturers believe that with the implementation of MIP, foreign suppliers will not be able to sell goods below a fixed price in the Indian market. This policy will create a level playing field between domestic and foreign manufacturers and protect the market share of Indian units.

Zero tax corridor has become a major challenge for local industries

The main cause of this entire crisis is the India-ASEAN Free Trade Agreement (FTA) that came into force in the year 2010. Basic customs duty (BCD) on notebooks imported from ASEAN countries under this agreement is 0%. Additionally, foreign suppliers are also getting the benefit of 0% IGST due to certain local tax concessions and contractual synergies. Foreign companies are taking advantage of this zero-tax regime in India and pushing Indian MSME units out of the market.

Dumping from ASEAN countries and its serious impact on the market

10 countries are included under the Indo-ASEAN Free Trade Agreement: Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar and Cambodia. The association alleges that these countries, especially Indonesia, are abusing the duty-free route and dumping ready-made notebooks at very cheap rates in the Indian market. Indian MSME manufacturers are proving unable to survive in this uneven competition due to high cost of production.

Need for protective policies to save millions of jobs

The All India Notebook Manufacturers Association has warned that local manufacturing units will shut down if immediate action is not taken at the government level, depriving millions of livelihood. The onus is now on the Ministry of Commerce to speedily implement strong safeguard policies like MIP to promote the “Make in India” drive and protect local units, so that this vital industry of the country can survive.