How repairs could drive India's pitch to major tech companies

India will launch a pilot program to become a hub for electronics repair. The country plans to streamline import-export regulations to attract major tech companies to expand their operations in India.

While the government has worked to boost electronics manufacturing in India and has successfully attracted companies like Apple and Xiaomi, the country is yet to establish a repair outsourcing industry.

This industry is estimated to be worth $100 billion globally and is currently dominated by China and Malaysia.

The Indian government plans to test changes to reduce the time required for import and export approvals to just one day, thanks to a request from the industry group MAIT representing IT and electronics manufacturers, according to a report from Reuters.

This move comes as a significant improvement from the current approval process, which can take up to 10 days.

India also faces bottlenecks due to an e-waste mandate prohibiting local disposal of non-repairable products, contributing to increased logistics costs as they must be sent elsewhere. However, the government plans to recycle 5% of imported goods domestically to address this issue.

Companies like Lenovo and Cisco will participate in the program during the pilot phase. This program will allow for re-exporting imported electronics goods to countries other than the original one, which is currently prohibited under foreign trade rules.

MAIT Director General Ali Akhtar Jafri said that encouraging electronic manufacturers to outsource repairs in India would increase production capabilities and greater resilience against supply chain disruptions. He estimated the value of India's repair industry to reach $20 billion within five years.

Due to expensive repair costs in areas like Europe and the United States, many companies send their goods overseas. India has a significant cost advantage over repair hubs in China and Malaysia, with 57% and 26% cheaper labour costs, respectively.