India catching up with China, Vietnam on phone exports

New Delhi: India is fast bridging the gap with China and Vietnam in terms of mobile phone exports. While FY24 mobile exports from China and Vietnam fell 2.78% and 17.6%, respectively, from the year before, exports from India surged 40.5%, officials told ET, citing global trade data.

Further, the officials added that India has captured nearly 50% of the reduction in corresponding mobile phone exports from China and Vietnam. This suggests that the objective of gaining a bulk of the supply chain shift from China has been met.

“The smartphone production-linked incentive (PLI) scheme was announced with an objective to capture supply chain shifts from China. The results are beginning to show now,” an official said on condition of anonymity. While China remains the top exporter of mobile phones, India appears to be catching up.

According to International Trade Centre (ITC) data, Chinese exports of mobile phones dropped from $136.3 billion in FY23 to $132.5 billion in FY24 – a 2.8% reduction, amounting to a $3.8 billion decline in total exports. Similarly, Vietnam has also seen a fall in mobile exports--from $31.9 billion in FY23 to $26.27 billion in FY24, a 17.6% reduction, or a $5.6 billion decline in total exports. Total cumulative reduction in exports from both countries amounted to $9.4 billion.

ITC is a joint agency of the United Nations and the WTO and has been operating since 1968. The ITC trade map covers 220 countries and territories and 5,300 products.

India’s exports of mobile phones have risen over 40% to reach $15.6 billion in FY24 from $11.1 billion in FY23, an increase of $4.5 billion.

“The data implies that India captured nearly 50% of the total decline in mobile exports from China and Vietnam,” another official said.

Experts said that India grabbing its opportunity in the mobile phone exports space is a big win for the government. In the wake of the geopolitical situation and tensions with China, the government has been attempting to woo companies deploying the China+1 strategy to diversify supply chains and manufacturing.

The smartphone PLI scheme has been a success, particularly with Apple having made India its second base for iPhone manufacturing after China. The Cupertino-based giant started producing iPhones in the country under the PLI scheme announced in 2020. Three of its key iPhone vendors – Foxconn, Pegatron and Wistron (now owned by Tata) – set up factories in India following the scheme’s launch.

Apple has doubled production and exports from India in the last two fiscal years. According to information submitted by Apple’s vendors to the Ministry of Electronics and IT (MeitY) under the PLI scheme, production increased from $7 billion in FY23 to $14 billion in FY24, and exports from $5 billion to over $10 billion in the same period. In fact, iPhone exports contribute 65% of India’s $15.6 billion mobile exports, and over one-third of India’s electronics exports, which crossed $29 billion in FY24.

Firms such as Samsung will also start exporting a larger quantity of mobiles from India, said officials. The South Korean giant is also a beneficiary of the PLI scheme and its mobile phone exports from India stood at around $3.5 billion, which was a third of Apple’s exports, in FY24. Samsung is currently the largest exporter of mobile phones from Vietnam. According to a January 2024 report by Vietnam News Agency, as of late 2023, Samsung had invested $20 billion in Vietnam. Currently, more than 50% of Samsung products sold in the world are made in Vietnam.