Electronics Repair Services Outsourcing Pilot Initiative (ERSO)

Context: Ministry of Electronics & IT has launched ERSO Pilot initiative to validate transformational policy & process changes to make India the repair capital of the world. The pilot will run for a period of three months in Bengaluru. Five companies namely, Flex, Lenovo, CTDI, R-Logic & Aforeserve have volunteered for the pilot.

Electronics Repair Services Outsourcing 

  • Currently, India lacks a robust electronics repair outsourcing industry. 
  • Globally, outsourced electronics repair services outsourcing industry is estimated to be worth more than $100 bn. 
  • China & Malaysia are major players in this industry. 
  • Flex, Lenovo & Cisco are currently major players of Electronics Repair Services Outsourcing Industry.

Significance of Electronics Repair Service Outsourcing Industry for India

  • High repair costs in advanced countries like Europe and USA forces companies to send goods overseas to countries like India with cheaper labour costs like China, Malaysia and potentially in India. 
  • Revenue potential: The policy changes are expected to create a robust domestic ERSO industry in India and create an annual revenue of $20 bn and generate millions of jobs.
  • Extension of device life: ERSO initiative will enable extension of electronics device life globally by providing cheap and reliable repair of ICT products for the globe. According to Ministry of Electronics & IT, India generated more than 16 lakh tonnes (Third largest in the world) of e-Waste of which only 33% was processed. Thus, 67% of E-waste goes into landfills and remains unprocessed. Even majority of e-waste processing takes place in the informal sector. 
  • Promote circularity: A robust ERSO industry will support Mission LIFE and will be gamechanger for Global environmental sustainability and circular economy. 
  • Employment intensity: A repair based economic system has higher employment intensity as compared to a manufacturing-based ecosystem as product manufacturing is increasingly being mechanised due to technologies like additive manufacturing, robotics etc. 
  • Boosting domestic manufacturing: Repair outsourcing will incentivise electronic manufacturers to expand production capabilities in India. It has potential to boost manufacturing of components of spare parts and ensuring resilience to supply chain shocks.

Bottlenecks in developing Electronics Repair Services Hub

E-Waste rules: E-waste rules dealing with electronics goods bans companies from disposing of non-repairable products locally. This adds to the logistics costs as these electronic goods need to be sent back to countries from where they brought. 

Import-Export rules: Currently, permissions for imports & exports of faulty electronics products takes a long time. There is a need to ease the approval process for timely clearances so that devices can easily enter India for repairs and then be shipped back quickly. 

Policy changes required to establish India as an Electronics Repair Services Hub

  • Increasing consumerism and difficulty in accessing repair of devices have pushed consumers to give priority to replacement over repair whenever products become defective. 
  • Current legislative framework makes it difficult for consumers to repair their goods when legal guarantee for their products expires. 
  • Relaxing import-export rules for making it easy for companies to import-export repaired products. 
  • Grant permission for re-export of imported electronics goods to countries different from the one it was imported.
  • Relaxing E-waste rules: Government should allow recycling of 5% of imported goods domestically.

Right to Repair Framework

  • Right to repair refers to the right of end users  to repair devices they own or service without any manufacturer or technical restrictions. The idea is promote repair as an alternative to replacement of devices.
  • Department of Consumer Affairs has set up a committee for developing Right to Repair framework under Nidhi Khare (Additional Secretary of Department of Consumer Affairs).
  • Right to Repair will give consumers a chance to repair their products at an optimal cost instead of buying new products altogether. 
  • Forbid manufacturers from impose barriers that deny consumers the ability to repair consumer products like monopolisation and difficulty in access to components, difficulty access to product manuals and prohibition of third-party repairs. 
  • Department of Consumer Affairs has launched Right to Repair portal where companies will provide information on self-repair manuals, authorised & third-party repairers for companies and products.

Challenges for operationalising Right to Repair

Concerns of manufacturers: Manufacturers have raised concerns over data security & intellectual property and safety issues arising out of unauthorised repairs. 

Monopolistic policies of OEMs: 

  • Companies avoid publication of manuals which makes it difficult for customers to repair the products.
  • Companies have proprietary control over spare parts (regarding design for screws & other components)
  • Companies have monopoly on repair processes which infringes customer’s right to choose. For ex. Digital Warranty cards ensure that by getting a product repaired from a ‘non-recognised’ outfit, a customer loses the right to claim warranty.
  • Culture of planned obsolescence: Products are designed in such a way that any gadget lasts a particular time only and after that period it has to be mandatorily replaced. 
  • Making products repair friendly will pose technical & practical challenges for manufacturers.
  • Mandating right to repair can raise products of electronics products. 

Global Initiatives toward Right to Repair

  • Europe: EU has passed legislation mandating manufacturers to supply parts of products to professional repair professionals for a period of 10 years. 
  • UK: A legislation which mandates all electronic appliance manufacturers to provide consumers with spare parts for getting repair done either by themselves or by local repair shops. 
  • Australia: Australia has repair cafes that are free meeting places where volunteer repairmen gather to share their repairing skills. 
  • USA: President Biden has passed a presidential directive encouraging Federal Trade Commission to introduce right to repair. Some US states like New York & Colorado have already introduced legislation mandating Right to Repair. 
  • Similar laws have been passed in many other countries like South Africa, France, Canada etc. 

Salient features of Right to Repair framework

  • Framework for right to repair will break monopoly of manufacturers on repair and spare parts and benefit consumers. 
  • Mandatory for manufacturers of equipments to share product details with customers so that they can either repair them by self or by third parties, rather than only depending on original manufacturers.
  • Harmonize trade between original equipment manufacturers, third party buyers and sellers. 
  • Manufacturers of end products to provide access to complete documentation, manuals, schematic and software updates to consumers.  
  • Focus sectors of Right to Repair framework: Farming equipment, mobile phones & tablets, consumer durables, automobiles & automobile equipment. 
  • Boost local business and create employment for small repair shops & businesses.
  • Reducing electronic waste generation. 
  • Potential for India to emerge as a global electronics repair outsourcing hub. 

Way Forward

  • Enacting Right to Repair Legislation: Department of Consumer Affairs has set up Nidhi Khare Committee to develop a comprehensive right to repair legislation in India. This law should be enacted to provide rights of consumers to access cheap, affordable
  • Taking manufacturers on board: Right to repair cannot materialise on ground if government fails to win confidence of manufacturers. Thus, constant dialogue and engagement needs to be done on this issue between government & industry. Companies should realise the ease of repair will increase demand for their products among consumers. 

Adopt a phased approach: All products cannot be repaired with equal ease. For ex. It is difficult to repair complex products like earphones as compared to tablet & PC.

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