Mobile exports cross Rs 50k crore in eight months

At a time when exports in many sectors are either sliding or remaining stable at best, smartphone shipments from India crossed the Rs 50,000-crore mark during April-November 2022, up 110% compared to the same period last year. It is also up 10% 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.

Almost 40% of the Rs 50,000 crore worth of smartphones exported from India are iPhones, which Apple exports to Europe, West Asia and Asian countries, apart from China.

Samsung and a range of small exporters, most of which are Indian device makers, contributed the remaining 60%.

Apple vendors and Samsung are participants in the smartphone PLI scheme announced by the government in April 2020.

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Samsung, which has been manufacturing mobile phones in India for over a decade, was by far the leader in smartphone production and exports until recently. However, Apple overtook Samsung in November to clock exports worth Rs 4,300 crore – the highest the company has achieved since entering the PLI scheme with two of its three suppliers in August 2021.

Industry analysts said that the impact of the PLI scheme took about a year to take shape. While exports between April-August this year hovered between $440 and $700 million per month, the average export since September has been close to $1 billion per month.

Smartphones also boost the position of electronics as the leading contributor to exports from India. Until 2018, electronics was ranked as India’s 10th largest export segment, and now it has moved up to the sixth position. It is highly likely that electronics could be in the top five export segments of India by the end of FY23.

“Thanks to the smartphone PLI scheme, we have exceeded expectations in mobile exports. As we move 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.

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The increase in mobile phone exports is seen as a major success of the government’s flagship smartphone PLI scheme. The scheme prompted the reshuffling of Apple’s supply chains – one of the world’s largest and most complex – in the midst of the pandemic. Industry experts say that the focus will now turn to rapidly increasing value addition by expanding the components ecosystem by adding Indian companies to the global supply chain.

The government has launched 14 PLI schemes since April 2020. Most of them became operational from 2021, and some from 2022. In the telecom space, the government launched three schemes – large-scale electronics manufacturing (mainly smartphones), telecom and network products, and IT hardware. Of the three schemes, the smartphone PLI scheme was 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 will be Rs 28.15 trillion.