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The Central government plans to meet up to 70 per cent of the country's demand for IT hardware through domestic production within the next three years and cut dependence on imports from non-trusted sources, Minister of State for Electronics and IT Rajeev Chandrasekhar said on Friday.

"At present, almost 80 per cent of our supplies to the digital ecosystem come from imports and only 8-10 per cent of our supply requirement comes from India. We want to make that 65-70 per cent in the next three years," the minister told journalists.

Close to 40 companies, including global giants such as HP and Dell, have applied under the IT hardware PLI (productivity linked incentive) scheme for setting up factories to manufacture personal computers, laptops, tablets, servers and other equipment. The value works out to around Rs 4.65 lakh crore during the scheme period. The restrictions that are being introduced on imports are expected to trigger a surge in domestic investment.

Chandrasekhar said a draft of IT hardware import rules will be discussed with industry players later in the day as part of the strategy to reduce dependence on imports from non-trusted sources, which is an oblique reference to China.

Senior officials also point out that India’s trade deficit with China has soared to unsustainable levels and in any case there is a need to reduce imports from the Asian neighbour.

The government has already announced a clamp down on imports and has given a transition period of about three months till October31, before a new licensing regime for imports of laptops, tablets and personal computers comes into effect.

The government has issued a notification that import consignments can be cleared till October 31 without a licence and a government permit would be required for clearance of import from November.

The import restrictions are also expected to affect technology companies such as Apple and Samsung who are now expected to increase their investments in India.