According to data available exclusively with ET, mobile phone exports for April-September more than doubled to $4.2 billion, from $1.7 billion in the corresponding period of 2021. Previously, the highest monthly export of cellphones was in December 2021, when devices worth $770 million were shipped. Exports hovered around $700 million each month during June-August this year.
The estimated value of mobile phone exports in September 2022 showed a growth of more than 200% over September 2021, according to the data. “To sustain this growth, we are focusing on driving competitiveness through lower tariffs, improved logistics, labor reforms and deepening of the ecosystem,” Pankaj Mohindroo, chairman of handset industry body India Cellular and Electronics Association (ICEA), told ET.
Industry executives say export growth has been primarily driven by Apple contract manufacturers Foxconn, Wistron and Pegatron, along with Samsung — the leading global participants in the Rs 40,995-crore PLI scheme announced in April 2020.
Aiming for $60 billion by FY26
The global majors account for roughly 75-80% of smartphone exports from India.
According to ICEA data, exports of mobile phones constituted just around 1% of production in 2016-17, which increased to over 16% in 2021-22. “This will rise to approximately 22% of production in 2022-23,” according to the association.
The PLI scheme for smartphones launched in 2020 was aimed at weaning away manufacturers from dominant geographies such as China and Vietnam. Backed by the scheme, India is trying to catch up with the two countries, which still lead the world in mobile phone exports. India aims to export mobile phones to the tune of $60 billion by 2025-26.
PLI success
The smartphone PLI scheme’s success has prompted the government to launch similar schemes across 14 sectors, such as automobile and auto components, IT hardware, telecom equipment and design, pharmaceuticals, solar modules, metals and mining, textiles and apparel, white goods, drones and advanced chemistry cell batteries.
Backed by the scheme, mobile phones have also become the single largest contributor to electronics exports. With Apple and Samsung pressing the pedal on exports, India-made devices are now being shipped to countries including the UK, the Netherlands, Austria and Italy, say industry executives. Earlier, India-made handsets were being exported mainly to the Middle East, Africa and South Africa.
According to industry data, the export of electronics goods during April-September 2022 also grew 54% to $10.2 billion, from $6.5 billion in 2021-22. As per ICEA, the increase in mobile phone exports to the tune of $2.5 billion in April-September this year, constituted nearly 68% of the total increase of $3.7 billion in electronics exports.
“PLI has helped mobile manufacturers to leverage volumes that have made manufacturing feasible in the country… (This) will eventually lead to economies of scale, which is the bedrock of any sustainable manufacturing function,” said Faisal Kawoosa, chief analyst, Techarc.
He added that along with this, as high-end smartphones such as iPhone 14 have also started being manufactured out of India, the contribution of exports will also only grow. “With the global economic condition turning gloomy, India could leverage it to become an alternative affordable manufacturing hub of smartphones, supported by initiatives like the PLI scheme,” said Kawoosa.
Smartphone shipments in the festive season so far are as much as 20-25% lower from a year earlier at around 18 million units, hurt by tepid demand in the high-volume, entry-level price segments amid accelerating inflation, say market trackers.
Global duo
Two of Apple’s three contract manufacturers — Wistron and Foxconn — are in the second year of their five-year PLI scheme, while Pegatron, which started operations this April, is in its first year.
Korean major Samsung, which has existed in India for over a decade, has reached the midpoint of the scheme in September 2022. It has two-and-a-half years more to go. In fact, Samsung was the only company that met the production targets in the first year of the scheme, which was launched at the height of the Covid-19 pandemic.
Apple has indicated the importance of India in its global strategy of diversifying manufacturing and lowering dependence on China. Within 10 days of the global launch of its latest model, iPhone 14, Apple announced its manufacturing from the Foxconn factory in Tamil Nadu.
Under the PLI scheme, the government has projected an incremental production of Rs 10.5 lakh crore, exports of Rs 6.5 lakh crore and 800,000 direct and indirect new jobs during the five-year period, say experts.
At the current rate of expansion, electronics exports could touch $20 billion for financial year 2022-23, pushing it from being in the top 10 exports only four years ago, to the top five exports from India by 2024.
Mobile phones could contribute 45-50% of all electronics exports over the next few years, estimated ICEA.
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