This week, India will begin a trial effort to become an electronics repair hub by loosening import-export laws, which might attract tech giants like Flex (FLEX.O).
Prime Minister Narendra Modi has promoted electronics manufacturing in India and attracted Apple (AAPL.O) and Xiaomi (1810. HK). Still, the country lacks a repair outsourcing industry worth $100 billion globally and is dominated by China and Malaysia.
MAIT, an IT and electronics sector organization, lobbied the Indian government to explore reducing import and export approval times to a day from 10 days.
MAIT Director General Ali Akhtar Jafri said the government has agreed to streamline tax approvals so devices can enter India for repairs and be shipped back fast.
India’s e-waste legislation requires enterprises to ship back non-repairable products, increasing logistics expenses. The government will trial recycling 5% of imported items.
In the pilot phase, which will include Lenovo (0992. HK) and Cisco (CSCO.O), India would allow the re-export of imported gadgets to nations other than the original one, which is now prohibited under foreign trade regulations.
Flex, Lenovo, and Cisco did not answer Reuters’ inquiries. India’s IT ministry didn’t reply either. However, repair outsourcing will encourage Indian electronic firms to increase production. According to Jafri, India’s repair sector would be worth $20 billion in five years.
Jafri claimed that European and American repair prices force companies to ship goods abroad. India’s cheaper labor costs offer it a 57% cost edge over China and 26% over Malaysia, two of the main repair hubs.