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Doubling of smartphone exports drives Indian electronics exports

Apple is fast catching up with Samsung as far as smartphone exports from India is concerned. While Samsung’s smartphone exports in value terms stood at around $2.8 billion during April-October, Apple was not far behind at $2.2 billion.

The scaling up of exports by Apple is noteworthy because the iPhone maker held a miniscule share a year ago.

Industry experts said that at this speed, Apple is seen catching up with Samsung by the end of the current fiscal and would surpass the South Korean rival by the next fiscal.

The total mobile phone exports during April-October 2022 stood at $5 billion, up 127% from the year-ago period. Both the companies are manufacturing smartphones in the country under the government’s production-linked incentive (PLI) scheme. Apple phones are being manufactured by three of its contract manufacturers – Foxconn, Pegatron and Wistron.

During April-October 2021, the total mobile phone exports from India stood at $2.2 billion and 90% of this was from Samsung ($1.98 billion). Apple’s share was low at only 10% ($220 million) as it started production and exports in full swing only in August 2021. Samsung had begun the same from August 2020.

While Samsung qualified for PLI in FY21, Apple couldn’t due to Covid-related disruptions in supply chain. Since Samsung already had a running domestic production in the country, it did not face any such disruption.

The government later gave an additional year to smartphone players under the PLI scheme to make up for the losses in Covid-hit 2020. So, out of a six-year time-frame, companies can choose a five-year period to meet the incremental production and sales target specified under the PLI scheme. While the period for Samsung is from 2020 till 2025, for Apple it is from 2021 till 2026.

Propelled by smartphone exports by these two companies, electronics registered the second-highest growth in exports during the April-October period to $12.14 billion, up from $7.87 billion a year ago – a 55% jump. For perspective: During April-October 2021, mobile phones contributed 30% of the total electronics exports, while during the same period in 2022, it stood at 41%.

“Doubling of smartphone exports is largely driving electronics exports. We want to ensure that the sector remains competitive since we are up against China and Vietnam – both formidable trade competitors for India. We also need to keep investor sentiment high so that the shift of supply chains to India remains buoyant,” Pankaj Mohindroo, chairman, India Cellular and Electronics Association (ICEA).

The government has launched 14 PLI schemes since April 2020. Most of them came into effect from 2021, and some from 2022. In the telecom space, the government launched three schemes – large scale electronics manufacturing (primarily smartphones), telecom and networking products and IT hardware. Of the three schemes, smartphone PLI has been 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 would be of Rs 28.15 trillion. Financial Express

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