Electronics ranked as India’s 10th largest export segment till 2018. Now, it has moved up to the sixth position.
Smartphone exported from India have crossed Rs 50,000 crore. Nearly 40% of them are iPhones, which Apple exports to Europe, West Asia and Asian countries, except China. Samsung and a range of small exporters, most of which are Indian device makers, contributed the remaining 60%.
During April-November 2022, smartphone shipments from India crossed the Rs 50,000-crore mark at a time when exports in many sectors are either sliding or at best remaining stable. Up 110% compared to the same period last year. This is also 10% higher from Rs 45,000 crore registered during the entire FY22.
The main contributors to this massive growth are Apple contract manufacturers – Foxconn, Pegatron (both located in Tamil Nadu) and Wistron (located in Karnataka) – and Samsung.
Apple’s vendors and Samsung are participants in the smartphone PLI scheme announced by the government in April 2020.
Samsung has been manufacturing phones in India for over a decade now. It was by far the leader in smartphone production and exports till recently. However, Apple overtook Samsung in november to clock exports worth Rs 4,300 crore. It’s the highest the company has achieved since it entered the PLI scheme with two of its three vendors in August 2021.
Industry analysts said that the impact of the PLI scheme took about a year to take shape. While exports hovered between $440 and $700 million per month between April-August this year, the average exports since September are nearly $1 billion per month.
India’s position in electronic export
Electronics was ranked as India’s 10th largest export segment till 2018. Now, it has moved up to the sixth position. It is highly likely that electronics could be in the top five export segments from India at the end of FY23. Smartphones are also driving up the position of electronics as the leading contributor to exports from India.
“Thanks to the smartphone PLI scheme, we have exceeded expectations in mobile exports. As we transition from import substitution to exports, especially at this scale, India’s competitiveness, especially on tariffs, becomes critical. We also need a robust component PLI scheme to expand the local ecosystem,” Pankaj Mohindroo, chairman, India Cellular and Electronics Association (ICEA), told FE.
The government has launched 14 PLI schemes since April 2020. Most of them came into effect from 2021, and some from 2022. The government launched three schemes in the telecom space, large scale electronics manufacturing (primarily smartphones), telecom and networking products, and IT hardware. Of the three schemes, the smartphone PLI scheme has been the most successful. In fact, it is currently the most successful scheme across all 14 PLI schemes, and also the largest.
The 14 PLI schemes will attract an incentive of Rs 2.4 trillion, with investments of Rs 2.54 trillion. The expected incremental output over the next 5-6 years would be of Rs 28.15 trillion.
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