Apple and Samsung, who manufacture their smartphones in India under the production-linked incentive (PLI) scheme, have helped push electronics exports during the first two months of this fiscal to the third spot. Electronics, which were the fifth largest contributor to India’s exports in FY24, have overtaken gems and jewellery in during April-May.
According to department of commerce data, electronics exports during April-May stood at $5.62 billion, an increase of 24% over $4.52 billion during the same period last year.
Of the total $1.1 billion increase in electronics exports, outbound mobile phone shipments accounted for $923 million, which constitutes 84% of the total increase.
While total mobile phone exports during this period grew 66%, Apple’s iPhone exports were the single largest contributor to this, followed by Samsung. iPhones exports jumped 38% to $2.2 billion during the two months from $1.6 billion in the year-ago period. This is the first time since the start of the smartphone PLI scheme in 2021 that Apple has crossed $1 billion iPhone exports each month.
The growth in iPhone exports accounts for 55% of the increase in electronics exports during this period. Samsung also increased its exports during these two months to $349 million over the corresponding period last year.
Mobile phone exports in FY24 had touched $15.6 billion, 40% higher than over $11.1 billion recorded in FY23. As an independent product category, mobile phones jumped from the fifth position in FY23 to fourth in FY24. Electronics also registered a growth of 24% in FY24 reaching a figure of $29.1 billion against $23.6 billion in FY23.
Electronics as a composite category also jumped one position from the sixth largest export in FY23 to the fifth largest in FY24.
iPhones are produced in India by its three vendors: Foxconn Hon Hai, and Pegatron in Tamil Nadu, and Wistron — now owned by the Tata Group — in Karnataka. Of the total production, over 70% is contributed by Foxconn, with the remaining 30% coming from Pegatron and Wistron.
The smartphone PLI scheme is considered by far the most successful of all 14 incentive schemes on multiple accounts, be it incremental production over base year 2019-20, exports, job creation or investments.
Each Apple vendor is required to invest Rs 1,000 crore during the five-year tenure of the scheme. All three are ahead of their investment schedules. While Foxconn Hon Hai has already qualified for the PLI incentive for FY24, Pegatron and Wistron are expected to cross the threshold of a minimum Rs 15,000-crore production shortly. All three companies will thus individually qualify for PLI in the third year, with Foxconn expected to go over the threshold.
Samsung and Bharat FIH, another Foxconn company, are also significant participants in the smartphone PLI scheme. Indian companies Lava, Bhagwati (Micromax), Padget Electronics (Dixon), UTL Neolyncs and Optiemus Electronics are also participants.
The five-year PLI scheme that started in 2020 ends in 2026, where each company had the flexibility to choose any five consecutive years.
