Electronics Repair Pilot Project

May 31, 2023

The government of India will launch a pilot project with the objective of capturing a significant share of the global electronics repair industry. Led by the Ministry of Electronics and Information Technology (MeitY), this initiative aims to promote India as a hub for repairing electronic goods. The country’s abundant availability of cheap labor is considered a key advantage in achieving this goal.

Background

Recommendations for electronics repair services outsourcing (ERSO) were submitted to MeitY by the Manufacturers Association of Information Technology (MAIT). In response, the government has undertaken this pilot project to assess the feasibility and potential of capturing 20% of the global repair service market within five years. The current value of the global repair service market stands at a substantial $100 billion.

Duration and Customs Rules Changes

The pilot project is set to run for two months, commencing on June 1. During this period, customs rules will be relaxed to facilitate the import and export of electronics products. Previously, the approval process for such transactions took approximately 10-15 days. Under the new rules, the approval process will be expedited, reducing the timeframe to just one day. This change aims to improve efficiency and promote the ease of doing business in India.

Restrictions and Cost Advantages

Although the repaired goods will not be permitted to be sold in the domestic market, provisions will be made to allow their exportation to regions other than their country of origin. In addition, India’s e-waste policy will be modified to enable repair companies to domestically recycle 5% of imported goods by weight on a trial basis. This change will reduce logistics costs associated with sending non-repairable products back for disposal.

India holds significant cost advantages over other countries in the repair services sector. Compared to China, India boasts a 57% cost advantage, and when compared to Malaysia, it offers a 26% cost advantage. These cost differentials make India an attractive destination for outsourced repair services.

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