Mobile phone exports from India will increase by 75% from US$3.16 billion in 2020-21 to over US$5.5 billion in the current financial year, according to a recent report. The rise has been attributed to the government’s smartphone production-linked incentive (PLI) scheme, which was launched in April 2020 and aims to enhance India’s share in global markets by moving global value chains (GVCs) to the country.
An industry expert explained that the unprecedented increase in smartphone exports is the result of government-industry partnerships during the COVID-19 epidemic. The pandemic, which hit in 2020, created unstable conditions but the industry stabilised operations in 2021 and delivered results that surpassed the expected outcomes. The growth in exports is a sign of the shift in the export basket, which is steadily moving from primary commodities to more value-added, high-end products powered by technology industries, the report said.
The smartphone PLI saw participation from both domestic and global companies. Under the PLI scheme, which will span five years, selected companies are expected to lead to a total production of over IN₹10.5 trillion (US$137.7 billion), of which exports will account for approximately 60%, valued at IN₹6.5 trillion (US$85.2 billion). During the same period, the government hopes that about 800,000 new jobs (200,000 direct and 600,000 indirect jobs) will be generated in the country.
Mobile phones are also among the products that are expected to lead India’s transformation into a US$300 billion electronics manufacturing powerhouse, according to a report released by the Ministry of Electronics and Information Technology (MeitY) and the India Cellular and Electronics Association (ICEA), in January. The five-year roadmap and vision document for the country’s electronics sector, “$300 bn Sustainable Electronics Manufacturing & Exports by 2026”, is the second volume of a two-part report. The first part was released last November and was titled, “Increasing India’s Electronics Exports and Share in GVCs”.
As OpenGov Asia reported, the second volume provides year-wise break-ups and production projections for several products that could add to India’s current US$75 billion electronics manufacturing sector. Apart from mobile phones, key products include consumer electronics, industrial electronics, auto electronics, electronic components, LED lighting, strategic electronics, PCBA, wearables, and telecom equipment. Mobile manufacturing, which could cross US$100 billion annual productions (up from the current US$30 billion), is expected to constitute nearly 40% of the growth. The domestic market is forecast to grow from US$65 billion to US$180 billion by 2026, which will put electronics among India’s top-ranking exports by that time. Of the US$300 billion, exports are expected to increase from the current US$15 billion to US$120 billion by 2026.
Officials explained that the strategy is based on an “all of the government” approach, particularly focusing on strengthening electronics manufacturing in India. This will be achieved by building competitiveness and scale by attracting global electronics manufacturers/brands; shifting and developing sub-assemblies and the component ecosystem; building a design ecosystem; nurturing Indian entrepreneurs; and gradually reducing cost disabilities.
