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UPDATE 1-India launches electronics repair pilot project to lure manufacturers

(Adds details from release and background throughout)

BENGALURU, May 31 (Reuters) - India has launched a pilot project to establish itself as an electronics repair hub with certain favourable policy changes, which has already attracted companies like Lenovo and Flex, the country's IT ministry said on Wednesday.

The ministry did not elaborate on the policy changes, but Reuters has reported that India plans to relax some of its cumbersome import-export rules and environmental laws to help foreign manufacturers to set up repair hubs in the country.

The three-month-long Electronics Repair Services Outsourcing (ERSO) program is India's first formal attempt to capitalise on a $100 billion global industry and follows a push by MAIT, an industry group for IT and electronics manufacturers.

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Besides, China's Lenovo and Singapore-based Flex , electronic manufacturers like CTDI, R-Logic, and Aforeserve have volunteered for the program, the ministry said in a statement.

While India is seeing increased interest in electronics manufacturing, with companies such as Apple pivoting from production in China, its repair outsourcing industry has been beleaguered by certain import-export rules.

The Indian government will test changes to lower the time required for necessary approvals for imports and exports to a day from as much as 10 days, Reuters has reported.

Bottlenecks in India also include an e-waste mandate that bans companies from disposing of non-repairable products locally - adding to their logistics costs as they have to be sent back.

The government will now allow recycling of 5% of imported goods domestically on a trial basis, Reuters reported.

In the pilot phase India will also permit re-export of the imported electronics goods to countries different from the original one - currently it is banned under foreign trade rules. (Reporting by Varun Vyas in Bengaluru and Munsif Vengattil in New Delhi; Editing by Savio D'Souza)