This week, India will launch a trial effort to attract tech giants like Flex to grow their operations in the nation by making it easier for them to import and export parts for electrical devices.
Even though Apple and Xiaomi have set up shop in India thanks to Prime Minister Narendra Modi’s push for electronics manufacturing, the country still lacks a repair outsourcing industry, which is estimated to be worth $100 billion (roughly Rs. 8.2 lakh crore) globally and is currently dominated by China and Malaysia.
The Indian government will experiment with new policies in response to a request by MAIT, an IT and electronics manufacturing sector association, to reduce the time it takes to get import and export clearances from as much as 10 days to just one.
So that gadgets may enter India for repairs and then be transported out fast, the government has agreed to streamline the approval procedure for rapid approvals with the tax authorities, according to MAIT Director General Ali Akhtar Jafri.
In addition, corporations in India are hampered by an e-waste rule that forbids them from dumping unfixable devices in the country, driving up logistical expenses. The experimental program will enable domestic recycling of 5% of imported items.
In the trial phase, India will also allowed re-export of the imported electronics items to nations different from the original one; at now, this is prohibited under international trade regulations. Companies like Lenovo and Cisco will take part in the program.
Reuters’ inquiries for response from Flex, Lenovo, and Cisco went unanswered for some time. The Indian government’s information technology department also did not immediately comment.
Electronics manufacturers in India would be encouraged to increase their output if they can take advantage of repair outsourcing. According to Jafri, who predicted that India’s repair business will be worth $20 billion (about Rs. 1.6 lakh crore) in five years, this is a crucial step towards assuring resilience to supply chain shocks.
According to Jafri, corporations are shipping items abroad because of the high cost of repairs in developed nations. India, he said, has a 57% cost advantage over China and a 26% cost advantage over Malaysia because of its reduced labor expenses.