India is set to introduce new restrictions on the import of laptops, tablets, and personal computers starting in January, aiming to boost domestic manufacturing. This move could significantly impact the country’s IT hardware market, valued between $8 billion and $10 billion, which currently relies heavily on imports. The Indian government hopes to shift more production locally through this initiative, which is expected to reshape the industry.
The country previously attempted to limit imports of such devices but faced backlash and pressure from international companies, particularly from the US. At present, companies can import laptops into India through a simple online registration system. However, India’s Ministry of Electronics and Information Technology (MeitY) is now developing a new system that will require prior authorisation for imports.
India’s IT hardware market, which is worth nearly $20 billion, depends on imports for two-thirds of its demand, with much of it coming from China. To encourage local production, the Indian government has offered $2.01 billion in subsidies, attracting interest from major manufacturers such as Acer, Dell, HP, and Lenovo. Many of these companies are reportedly preparing to begin local manufacturing under India’s production incentive program.
Tech giants like Microsoft and Qualcomm are aggressively promoting a new category of computers dubbed ‘AI PCs,’ which boast integrated AI capabilities. These machines feature dedicated processors designed to enhance AI functions such as personal assistants and task automation, distinguishing them from standard laptops and desktops.
Despite the hype, only a tiny fraction—just 3%—of PCs shipped this year meet Microsoft’s stringent processing power criteria to qualify as AI PCs, according to IDC. Analysts remain sceptical about the practical utility of these AI features, noting limited software support beyond Microsoft’s ecosystem. Major developers like Adobe, Salesforce, and SentinelOne have hesitated to optimise their applications for AI PCs, preferring to deliver AI capabilities via cloud services.
While some smaller software firms have tailored their apps for on-device AI, more considerable adoption hurdles persist. Initial reviews highlight that current AI functionalities on these PCs, such as eye-tracking during video calls and generative AI content creation, are often seen as gimmicks rather than transformative tools. Furthermore, privacy concerns delayed the rollout of flagship AI features like Microsoft’s Recall.
Why does this matter?
Despite challenges, industry players are optimistic about the potential of AI PCs to rejuvenate the stagnant PC market. With superior battery life and promises of enhanced performance, these devices aim to entice consumers who last upgraded at the pandemic’s onset. Market data from Circana indicates early traction, particularly among tech-savvy users and content creators.
Looking ahead, Qualcomm, vying to challenge Intel’s dominance in PCs, plans to market its Snapdragon processors for AI PCs aggressively. Intel and AMD are expected to release competing models later this year, addressing compatibility issues that currently limit adoption. Industry analysts project AI PCs to comprise about 20% of new PC shipments by 2026, signalling a slow but steady shift towards AI-enhanced computing solutions.
