india mobile exports: Monthly mobile phone exports hit record $1 billion in September

Monthly mobile phone exports from India reached $1 billion (over ₹8,200 crore) in September for the first time. They were boosted by the government’s production-related incentive program (PLI), which has prompted global players such as Apple and Samsung to increase local production for both domestic and foreign markets.

According to data available exclusively from 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 mobile exports were phones in December 2021, when devices worth $770 million were shipped. Exports fluctuated around $700 million a month between June and August this year.

The estimated value of mobile phone exports in September 2022 showed growth of more than 200% from September 2021, according to the data. “To support this growth, we focus on boosting competitiveness through lower tariffs , improved logistics, labor reforms and deepening of the ecosystem,” Pankaj Mohindroo, president of the India Cellular and Electronics Association (ICEA), the handset industry body, told ET.

Industry executives say export growth has been mainly driven by Apple contract manufacturers Foxconn, Wistron and Pegatron, along with Samsung – leading global participants in the ₹40,995 crore PLI scheme announced in April 2020.

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The global majors account for about 75-80% of India’s smartphone exports.

According to ICEA data, mobile phone exports made up only about 1% of production in 2016-17, rising to more than 16% in 2021-22. “This will increase to about 22% of production in 2022-23,” the association said.

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The smartphone PLI scheme launched in 2020 aimed to move manufacturers away from dominant geographies such as China and Vietnam. Backed by the scheme, India is trying to catch up with the two countries, which are still the world leaders in mobile phone exports. India aims to export mobile phones worth $60 billion by 2025-2026.

PLI success

The success of the PLI smartphone program has prompted the government to launch similar programs in 14 sectors, such as auto and auto parts, IT hardware, telecom equipment and design, pharmaceuticals, solar panels, metals and mining, textiles and clothing, white goods, drones and advanced chemical cell batteries.

Backed by the scheme, mobile phones have also become the largest contributor to electronics exports. With Apple and Samsung pushing the pedal on exports, Indian-made devices are now being shipped to countries like the UK, the Netherlands, Austria and Italy, industry executives say. Previously, Indian-made handsets were mainly exported to the Middle East, Africa and South Africa.

According to industry data, exports of electronic goods also grew 54% to $10.2 billion in April-September 2022, from $6.5 billion in 2021-22. According to the ICEA, the $2.5 billion increase in mobile phone exports in April-September this year accounted for nearly 68% of the total $3.7 billion increase in electronics exports.

“PLI has helped mobile manufacturers leverage volumes that have enabled manufacturing in the country… (This) will ultimately lead to economies of scale, which is the foundation of any sustainable manufacturing function,” said Faisal Kawoosa, principal analyst, Techarc.

He added that as high-end smartphones such as iPhone 14 are also produced in India, the contribution of exports will only grow. “As the global economic condition turns bleak, India could use it to become an alternative affordable smartphone manufacturing hub, supported by initiatives such as the PLI scheme,” Kawoosa said.

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Global duo

Two of Apple’s three contract manufacturers – Wistron and Foxconn – are in the second year of their five-year PLI arrangement, while Pegatron, which started in April, is in its first year.

The Korean major Samsung, which has been around in India for more than a decade, has reached the center of the plan in September 2022. It still has two and a half years to go. In fact, Samsung was the only company to meet production targets in the first year of the plan, which was launched at the height of the Covid-19 pandemic.

Apple has highlighted India’s importance in its global strategy to diversify manufacturing and reduce reliance on China. Within 10 days of the global launch of its latest model, iPhone 14, Apple announced production from its Foxconn plant in Tamil Nadu.

Under the PLI scheme, the government forecasts incremental output of 10.5 lakh crore, exports of ₹6.5 lakh crore and 800,000 direct and indirect new jobs over the five-year period, experts say.

At the current rate of growth, electronics exports could reach $20 billion in fiscal year 2022-23, taking it from the top 10 exports from India just four years ago to the top five exports from India by 2024. Mobile phones could contribute 45-50% of all electronics exports in the coming years, ICEA estimates.

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