Electronic Goods Shine Even As Global Slowdown Hits Demand, Exports Soar

Even as slowdown takes a toll on global demand and domestic production, electronic goods have given a reason to cheer for India. Beating the 6.57 percent contraction in the overall merchandise exports in September, exports of electronic goods have substantially outperformed. The electronic goods exports grew with the highest pace of 33.1 percent on-year in September, according to the Department of Commerce. The momentum of electronic goods exports from India is not new now as it is exponentially surging since FY18. The electronics industry is among the largest and fastest-growing manufacturing industries globally, with production estimated at $ 2.9 trillion in 2018, says RBI.

In the past two years, the exports of equipment with electronic integrated circuits and micro assemblies have grown at 94.9 percent in FY18 and 162.5 percent in FY19. The Narendra Modi-led government has been consistently rolling out measures to boost the production of electronic goods including mobile handsets under the flagship schemes such as ‘Make in India’ and ‘Digital India’.

Union Budget 2015-16 introduced the Phased Manufacturing Programme (PMP) for mobile handsets and its related sub-assemblies. This involved countervailing duty on mobile phone imports, differential excise duty for domestic mobile phone manufacturing, and exemption of parts, components, and accessories of mobile phones from basic customs duty to encourage domestic manufacturing of mobile phones. On top of it, the Electronic Development Fund was also created in February 2016 to provide a financial cushion for risk to firms developing new technologies in the sphere of electronics and information technology.

Meanwhile, the production of mobile phones in India shot up 8-folds in the last five years. India produced mobile phones worth $ 24.3 billion in 2018-19, which was just $ 3.1 billion in 2014-15, going by the RBI report.―Financial Express