The project, led by the ministry of electronics and information technology (MeitY), will look to promote India as a hub for repair of electronic goods, taking into account the cost advantage the country has due to the availability of cheap labour.
This follows recommendations submitted by the Manufacturers Association of Information Technology (MAIT) regarding electronics repair services outsourcing (ERSO) to MeitY.
“The ERSO pilot is the first step towards making India the global repair hub of the world…,” said Colonel Ali Akhtar Jafri (Retd), director general, MAIT. “The revised custom process will be set as precedence for such process refinements that ease dwell time at ports and will contribute immensely towards ease of doing business and speed of doing business in India.”
Through the ERSO scheme, set to be notified after the pilot project is assessed, India hopes to capture 20% of the global repair service market – currently valued at $100 billion – in five years. At present, India’s revenue from repair services is about $350 million.
The project will run for two months beginning June 1, before being assessed for a wider policy, which is set to be notified in August with the necessary approvals.To facilitate the project, the government will relax its customs rules to approve import and export of electronics products within a day, down from the earlier 10-15 days, according to Jafri.The repaired goods, however, will not be allowed to be sold in the domestic market, but provisions will be made to allow them to be exported to regions other than from where they were imported.
The project will also tweak India’s e-waste policy that bans companies from disposing non-repairable products locally, which will then add to the logistics costs for sending them back. The government will now allow repair companies to recycle 5% of imported goods (by weight) domestically on a trial basis.
The pilot project could draw global repair companies like US-based Flex and CTDI, as well as domestic companies such as Bengaluru-based Aforeserve. IT hardware maker Lenovo, too, will be participating in the pilot project.
“India has a strong business case to attract outsourced repair services due to cheaper labour as compared to China, Malaysia, Indonesia and Hungary, which are the largest repair hubs globally,” Jafri said.
He said India has a cost advantage of around 57% over China and 26% over Malaysia when it comes to repair services.
