Monthly mobile phone exports hit record $1 billion in September

Monthly mobile phone exports hit record $1 billion in September

Monthly mobile phone exports from India touched the $1-billion mark (over ₹8,200 crore) for the first time ever in September. They were boosted by the government’s production-linked incentive (PLI) scheme, which has pushed global players such as Apple and Samsung to increase local production for the domestic as well as overseas markets.

According to data available exclusively from ET, April-September mobile phone exports more than doubled to $4.2 billion, from $1.7 billion in the corresponding period of 2021. Before that, was the highest monthly export of mobile phones in December 2021, when $770 million worth of devices were shipped. Exports were about US$700 million every month from June to August this year.

The estimated value of mobile phone exports in September 2022 showed more than 200% growth compared to September 2021, according to the data increase,” Pankaj Mohindroo, chairman of the India Cellular and Electronics Association (ICEA), told ET.

Industry leaders say export growth was primarily driven by Apple contract manufacturers Foxconn, Wistron and Pegatron, as well as Samsung – leading global participants in the ₹40,995 crore PLI program announced in April 2020.

By FY26, we are targeting $60 billion

The global majors account for around 75-80% of smartphone exports from India.

According to ICEA data, mobile phone exports accounted for only about 1% of production in 2016-17, which increased to over 16% in 2021-22. “This will increase to around 22% of production in 2022-23,” according to the association.

Launched in 2020, the PLI program for smartphones aimed to squeeze out manufacturers from dominant regions such as China and Vietnam. Assisted by the program, India is attempting to catch up with the two countries that still lead the world in mobile phone exports. India aims to export US$60 billion worth of mobile phones by 2025-26.

PLI success

The success of the smartphone PLI program has prompted the government to introduce similar programs in 14 sectors including automobiles and auto components, IT hardware, telecom equipment and design, pharmaceuticals, solar panels, metals and mining, textiles and apparel, home appliances, drones and more advanced chemistry cell batteries.

Supported by the program, mobile phones have also become the largest single contributor to electronics exports. With Apple and Samsung stepping on the gas when it comes to exports, Indian-made devices are now being shipped to countries like the UK, the Netherlands, Austria and Italy, industry executives say. Mobile phones made in India used to be mainly exported to the Middle East, Africa and South Africa.

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

“PLI has helped cellphone manufacturers leverage volumes that made in-country manufacturing possible…(This) will eventually lead to economies of scale that form the bedrock of any sustainable manufacturing function,” said Faisal Kawoosa, Techarc’s principal analyst.

He added that as high-end smartphones like the iPhone 14 are also manufactured in India, the contribution of exports will also only increase. “In the face of grim global economic conditions, India could use it to become an alternative, affordable manufacturing center for smartphones, supported by initiatives like the PLI program,” said Kawoosa.

Global duo

Two of Apple’s three contract manufacturers — Wistron and Foxconn — are in their second year of their five-year PLI program, while Pegatron, which began operations in April, is in its first year.

Korean major Samsung, which has existed in India for over a decade, is halfway through the program in September 2022. He still has two and a half years ahead of him. In fact, Samsung was the only company to hit production targets in the first year of the program, which was launched at the height of the Covid-19 pandemic.

Apple has highlighted the importance of India in its global strategy to diversify manufacturing and reduce dependence on China. Within 10 days of the global launch of its latest model, the iPhone 14, Apple announced manufacturing at the Foxconn factory in Tamil Nadu.

Under the PLI program, the government has forecast incremental production 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 expansion, electronics exports could reach $20 billion for FY2022-23, which would take them from the top 10 exports just four years ago to the top 5 exports from India by 2024. Cell phones could account for 45-50% of all electronics exports in the next few years, ICEA estimates.

The post Monthly mobile phone exports hit record $1 billion in September appeared first on Vietexplorer.com.

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