Major Sadhna Singh
Consultant
As India rapidly advances towards becoming a digital powerhouse through smart cities, public safety systems, and ambitious Digital Public Infrastructure (DPI) missions like India Stack and CoWIN, the invisible foundation of this transformation is the reliability of its hardware. Among the most critical components are Hard Disk Drives (HDDs), the quiet workhorses storing vast volumes of surveillance footage, citizen data, and mission-critical system logs.
But what if this very foundation is quietly being compromised?
India’s backdoor hardware invasion
India is witnessing a stealthy influx of used, refurbished, and end-of-life (EoL) hard drives, often mis-declared as new to evade regulatory controls. These HDDs enter through loopholes in trade classification, mostly without any quality checks, manufacturer credentials, or safety certifications. Many arrive under Harmonized System (HSN) Code 84717020, which is designated for new storage devices, thus circumventing licensing requirements under the Foreign Trade Policy (FTP) and violating E-Waste Management Rules.
On paper, India doesn’t prohibit refurbished HDD sales, but their import is tightly regulated. In practice, however, grey market players exploit the regulatory blind spots, resulting in a digital time bomb quietly ticking across our surveillance systems, government servers, and public sector installations.
The numbers tell a troubling story
● Over 3.3 million HDDs, many suspected to be used, were imported in FY 2023-24, outnumbering imports by authorized OEMs.
● In just the first nine months of FY 2024-25, an additional 1.9 million units were imported, suggesting a thriving grey market.
● Hyderabad Air Cargo alone accounts for up to 90% of these imports in recent months, with others entering via Chennai, Kolkata, and Mumbai.
● Top source countries include Hong Kong, Singapore, China, and the US, notorious hubs for global e-waste dumping.
Declared import prices, sometimes as low as USD11-20 per unit, are a fraction of the legitimate OEM cost (USD70-90). The under-invoicing not only implies massive tax evasion but also points to deep-rooted misdeclaration networks.
A. Port-wise import volumes
B. Country of origin
National security and cyber risks
These aren’t just dodgy business practices. They’re national security vulnerabilities.
Unlike surveillance-grade HDDs designed for 24×7 operations, refurbished drives, typically desktop-grade and not meant for continuous workloads, fail prematurely. In sensitive environments like railway command centres, police control rooms, or border surveillance hubs, such failures could mean loss of critical footage during emergencies, be it a riot, a terrorist attack, or an industrial accident.
Worse still, HDDs refurbished overseas may carry undetected firmware modifications, turning them into potential hardware backdoors. In an era where data is strategic capital, compromising hardware is equivalent to compromising sovereignty.
The economic fallout
Beyond the security risks, this grey market has led to:
● Crores in lost revenue due to customs duty evasion and GST shortfalls.
● Market distortion, where shady traders repackage used drives with new casings and stickers, selling them at inflated MRPs, sometimes even on government procurement platforms like GeM.
● Consumer fraud, with unsuspecting households and MSMEs believing they’ve bought new, warrantied products; when in reality, they’re buying used electronics with limited lifespan and no accountability.
Environmental non-compliance
The environmental cost is equally dire. India’s E-Waste Management Rules (2022) prohibit unregulated import of electronic waste. Many of these drives fail within months, turning into toxic waste streams without proper recycling mechanisms. Their import also potentially violates India’s obligations under the Basel Convention, which prohibits transboundary movement of hazardous e-waste disguised as usable goods.
Storage is sovereignty
In today’s world, sovereignty doesn’t just depend on borders, but on bytes. Trusted storage hardware is as vital as secure communications. From Aadhaar to AI models, from critical infrastructure to defence networks — our digital services rely on integrity at the hardware level.
Allowing unknown, unverified HDDs to creep into our systems threatens confidentiality, availability, and integrity, the very pillars of cybersecurity.
What needs to be done
1. Tighten the Legal Screws
● Issue clear DGFT and CBIC circulars reiterating licensing requirements for used HDDs.
● Move refurbished HDDs from ‘Restricted’ to ‘Prohibited’ category, except for OEMs under Extended Producer Responsibility (EPR).
2. Impose Minimum Import Prices
Introduce import price floors (e.g., USD 35 for 1TB drives) to stop under- invoicing and restore fair trade practices.
3. Mandate Labelling and Traceability Make it mandatory for all imported HDDs to:
● Be BIS registered.
● Carry labels indicating ‘Refurbished’ status, country of origin, and refurbisher’s identity
4. Secure Public Procurement Platforms like GeM should:
● Create a separate refurbished electronics category.
● Ban usage of non-certified drives in critical surveillance and defence contracts.
5. Conduct Strategic Audits Ministries such as MeitY, MHA, and MoHUA should:
● Audit existing HDDs used in police and smart city projects
● Run firmware-level forensic checks to detect possible vulnerabilities
● Involve CERT-In and NTRO in cases of national security concern
Conclusion: A call for a whole-of-government response
What India faces today is not just a trade irregularity, but a strategic vulnerability. The silent flood of unauthorized, potentially compromised HDDs threatens our national security, digital trust, consumer protection, and environmental goals, all at once.
This calls for a coordinated response from DGFT, CBIC, BIS, MeitY, MoEFCC, MHA, and GeM to plug gaps, ensure hardware integrity, and protect the digital spine of India.
In the data age, storage is infrastructure, and infrastructure is sovereignty. Let’s not allow backdoors to be built into our nation’s future, drive by drive.
