Electronics contract manufacturers such as Optiemus Electronics (OEL) and Videotex International have stated that the government's decision to impose import restrictions on laptops, tablets, and all-in-one personal computers will boost local IT hardware manufacturing in the short term. However, brands privately stated that the move would harm consumers due to supply issues and could even result in a price increase in the short term.

On the news, shares of Dixon Technologies and Optiemus Infracom, the parent company of OEL, surged on the BSE Thursday, outperforming the negative broader markets. Dixon rose 7.6% to Rs 4438.70, while Optiemus closed at Rs226, a 10% increase.

Leading IT hardware brands sold in India include Samsung, Dell, Apple, Acer, Lenovo, HP and Asus. Dixon already assembles laptops for Acer.

"We believe the government's decision to curb the laptop, tablet, and computer imports is progressive and has the potential to boost indigenous electronics manufacturing in the country...We currently hold the PLI for IT Hardware and are manufacturing laptops for notable brands. With this move, we expect further expansion of our capacity to manufacture these devices," said A Gururaj, MD, Optiemus Electronics Ltd.

Another senior executive at a contract manufacturer, who did not want to be identified, added that in the short term, local manufacturing of IT hardware could account for 60-70% of the $7 billion global manufacturing business, and even 90% in the next two years, similar to how TV assembly grew from negligible to significant with import substitution.

"The emphasis now is on the potential benefits such support can bring to R&D and electronic product manufacturing in the country." This strongly encourages the development of the entire manufacturing ecosystem in the country," said Arjun Bajaj, Director of Videotex International.