India to lure manufacturers with electronics repair pilot project

India will start a pilot project this week to establish itself as an electronics repair hub by relaxing cumbersome import-export rules, a move that could draw tech majors such as Flex to expand such operations in the country. Also Read: Xiaomi 18 Pro rumored feature: Dedicated button for instant AI actions and smart tasks

Prime Minister Narendra Modi has promoted electronics manufacturing in India and attracted the likes of Apple and Xiaomi, but the country still lacks an industry for repair outsourcing which is estimated to be worth $100 billion globally and currently dominated by China and Malaysia. Also Read: Xiaomi TV S Mini LED series launched in India starting at Rs 51,999: Specs, features

Following a push by an industry group for IT and electronics manufacturers, MAIT, the Indian government will test changes to lower the time required for necessary approvals for imports and exports to a day from as much as 10 days. Also Read: Redmi A7 Pro 5G launched in India with 6,300mAh battery, 120Hz display: Check price, specs here

MAIT Director General Ali Akhtar Jafri said the government has agreed to ease the approval process for timely clearances with the tax authorities so that devices can easily enter India for repairs and then be shipped back quickly.

Bottlenecks in India also include an e-waste mandate that bans companies from locally disposing of non-repairable products – adding to their logistics costs as they have to be sent back. The government will now allow the recycling of 5 percent of imported goods domestically on a trial basis.

In the pilot phase, which will see participation from companies including Lenovo and Cisco, India will also permit the re-export of the imported electronics goods to countries different from the original one – currently, it is banned under foreign trade rules.

Flex, Lenovo and Cisco did not immediately respond to Reuters’ requests for comment. India’s IT ministry also did not immediately respond.

“Repair outsourcing will incentivise electronic manufacturers to further expand their production capabilities in India. This is a critical step towards ensuring resilience to supply chain shocks,” said Jafri, who estimated the repair industry in India to be worth $20 billion in five years.

High repair costs in regions such as Europe and the United States are compelling companies to send goods overseas, Jafri said. He added that cheaper labour costs in India give it a total cost advantage of 57% over China and 26% over Malaysia – some of the biggest hubs for repairs at present.

Add Techlusive as a Preferred Source

— Reuters