Smartphones Become India’s Fourth Largest Export Item with 42% Growth

Smartphones have become a major export success story for India, now ranking as the fourth-largest export item with a 42% growth, reaching $15.6 billion in FY24. This marks an improvement by one notch in the ranking from the preceding year. Data collection for smartphones as a separate category began in April 2022, highlighting the sector’s rapid growth.

Key Growth Factors

The significant rise in smartphone exports is attributed to a 158% increase in shipments to the US, amounting to $5.6 billion. Other major markets include the United Arab Emirates ($2.6 billion), the Netherlands ($1.2 billion), and the UK ($1.1 billion). The total value of mobile devices produced in India for both export and domestic markets in FY24 surged to Rs 4.1 trillion ($49.16 billion), representing a 17% year-on-year increase.

Impact of the Production-Linked Incentive (PLI) Scheme

The government’s Production-Linked Incentive (PLI) scheme has been instrumental in this growth, positioning India as the second-largest mobile phone manufacturing country after China. The PLI scheme aims to attract companies manufacturing in China to shift to India, leveraging geopolitical tensions between China and the US. Notable beneficiaries include Apple’s vendors—Foxconn, Wistron India (now Tata Electronics), and Pegatron—along with Samsung.

Apple’s Leading Role

Apple has significantly contributed to the export surge, with outbound shipments of mobile devices expected to exceed Rs 1.2 trillion ($14.39 billion) in FY24, a 33% increase from Rs 90,000 crore in FY23. Preliminary ICEA data indicates that exports in FY24 accounted for nearly 30% of the total output value, up from 25% in FY23.

Future Outlook

The robust growth in smartphone exports underscores the effectiveness of India’s PLI scheme and highlights the country’s strategic shift in the global electronics manufacturing landscape. This growth trajectory is expected to continue, further solidifying India’s position as a key player in the global smartphone market.