India to lure manufacturers with electronics repair pilot project

India is set to initiate a pilot project this week aimed at positioning itself as a prominent electronics repair center by easing some of the import-export regulations. This move has the potential to attract major technology companies like Flex to expand their operations in India, Reuters news report said.
Philippines smartphone usersPrime Minister Narendra Modi has encouraged electronics manufacturing in India and enticed industry giants such as Apple and Xiaomi. However, India currently lacks a robust repair outsourcing industry, which is valued at approximately $100 billion globally and primarily dominated by China and Malaysia.

The Indian government, through the MAIT (Manufacturers’ Association for Information Technology), will test regulatory changes aimed at reducing the time required for import and export approvals from up to 10 days to just one day.

Ali Akhtar Jafri, Director General of MAIT, stated that the government has agreed to streamline the approval process, facilitating timely clearances with tax authorities. This will enable devices to enter India for repairs and be swiftly shipped back.

India plans to address other bottlenecks, including an e-waste mandate that currently prohibits local disposal of non-repairable products. The government intends to permit the domestic recycling of 5 percent of imported goods as a trial initiative.

During the pilot phase, companies such as Lenovo and Cisco will participate alongside Flex. India will also allow the re-export of imported electronics goods to countries other than their original destination, which is currently prohibited under foreign trade rules.

Ali Akhtar Jafri emphasized that repair outsourcing would incentivize electronic manufacturers to expand their production capabilities in India, thus bolstering supply chain resilience. He estimated that the repair industry in India would be valued at $20 billion within five years.

The escalating repair costs in regions like Europe and the United States are prompting companies to send goods overseas. India, with its lower labor costs, possesses a total cost advantage of 57 percent over China and 26 percent over Malaysia, both of which are major repair hubs at present.