Rachana Rautray Senior Associate
Restrictions imposed on the import of laptops, tablets and other specified computer systems from 1 November 2023
The Department of Commerce has amended the Indian Trade Classification (Harmonised System), 2022 to restrict the import of tablets, laptops, all-in-one personal computers (PC), and ultra-small form factor computers and servers, unless done pursuant to a license or exemption. While its implementation has been pushed to 1 November 2023, this amendment is expected to impact companies that import most of their information technology (IT) hardware into India for resale, particularly multinational companies such as PC manufacturers. The government’s intention may be to incentivise domestic manufacturing of electronics linked to the renewed production-linked incentive scheme for IT, and to reduce India's dependence on electronics imports from other countries. This move may also be informed by security-related considerations, such as protecting personal and confidential data from cyber-attacks while using IT hardware.
This restriction does not apply to the purchase of a single unit of laptop, tablet, all-in-one PC, or ultra-small form factor computer, including the ones purchased from or through e-commerce portal, post or courier (excluding certain types of servers). Additionally, exemption has also been provided for imports made for the following purposes:
- research and development, testing, benchmarking and evaluation, repair and re-export, and product development;
- use of such devices as essential parts of a capital good; and
- re-import of these devices if repaired abroad.
Digital Personal Data Protection Act, 2023 passed by the Parliament
The Parliament, in August 2023, passed the Digital Personal Data Protection Act, 2023 (DPDPA), which is set to overhaul India’s regulatory landscape for personal data. While the DPDPA has been notified in the Gazette of India, its provisions have not yet been brought into effect. Till this is done, the Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011 (Privacy Rules) will continue to apply. It is likely that the central government will provide various entities with time to comply with the DPDPA, once it is brought into effect. Further, many of its compliances are yet to be prescribed via delegated legislation. Entities will be expected to modify their internal practices, procedures and systems to comply with the various provisions of the DPDPA.
(To read our detailed update on the DPDPA, click here.)
Amendments to the Unified License, Unified License (Virtual Network Operator) and Unified Access Service License agreements to restrict licensees from entering into exclusive contracts with any person or public entity
The Department of Telecommunications (DoT) has introduced amendments to the Unified License (UL), the Unified License (Virtual Network Operator) (UL (VNO)), and Unified Access Service License (UASL). The revised clauses now require the licensees to refrain from entering into exclusive contracts with any 'public entity' or any 'person' for establishing a public network, in order to provide public telecom services or the Right of Way.
The amendments across the UL, UL (VNO), and UASL license agreements define ‘public entities’ as the central government, state governments, or other local authorities, and ‘person’, to include any individual, company or association of individuals. This prohibition on exclusive contracts has likely been introduced in the interest of promoting competition in the telecom space, preventing the creation of artificial barriers to entry, and granting all licensees the opportunity to set up telecom infrastructure over a certain territory without concerns for exclusivity.
Subscriber verification process streamlined for telecom licensees
The DoT has issued new instructions to licensees under the UL and UASL regimes to ease the process of subscriber verification for new mobile communications, SIM-swapping or replacement, and other matters requiring such verification. These instructions also ensure the commercial ease of onboarding subscribers by operators.
Particularly, the DoT has scrapped the erstwhile bulk connection regime for issuing mobile connections to companies, partnerships, etc., and has introduced a new 'business connections' category to regulate such issuance by prescribing the documents to be obtained by the telecom licensee from the entities, Know Your Customer (KYC) verification procedures to be undertaken on the entity's authorised representative, and other processes. The amendment also introduces features such as:
- auto-population of Customer Acquisition Forms (CAF) by scanning the Aadhaar QR code;
- modification of the Aadhaar-based electronic-KYC (e-KYC) process to use fingerprint, iris and face authentication for biometric authentication of subscribers;
- scrapping the earlier processes of SIM swaps/replacements, substituting them with e-KYC or digital KYC processes;
- capturing GPS coordinates before activating new SIMs; and
- providing a password-protected copy of the CAF to subscribers.
The upcoming quarter is also likely to see sustained efforts from the government to reduce regulatory burden and promote the ease of doing business in the telecommunication sector - with a new draft of the Telecommunications Bill on the anvil, expected to overhaul the existing telecommunication regulatory framework.