The central government’s production-linked incentive (PLI) scheme for the smartphone industry, which incentivised local assembling of smartphones in India, has boosted mobile phone exports from the country, according to data projections made by industry body, India Cellular & Electronics Association (ICEA).
The industry body, which counts Apple and Foxconn among its members, said that while India exported mobile phones worth $3.16 billion in FY21, this figure could rise to over $5.5 billion in FY22, by the end of this fiscal year. This marks a rise of over 75% in total export of mobile phones from India, which can be attributed to the PLI scheme offered to attract mobile phone manufacturers to India.
A total of 14 companies have been approved to reap the benefits of the smartphone PLI scheme, which was announced in April 2020 with total benefit outlay of Rs 40,951 crore (about $5.36 billion). However, the first year saw the covid-19 pandemic stutter production as factories were shut due to lockdowns. In June 2021, the Ministry of Electronics and Information Technology (Meity) stated that the timeline for meeting production targets has been increased by one year, counting FY21 as year zero.
ICEA states that by FY26, mobile phone manufacturers selected under India’s PLI scheme are tipped to reach cumulative mobile phone production worth Rs 10.5 lakh crore – of which 60% would account for exports.
ICEA’s projection comes at a time when multiple smartphone original equipment manufacturers (OEMs) have spoken about exporting devices from India – to the rest of the world. At Lenovo Tech World India 2022 earlier this month, Amar Babu, president of Lenovo Asia-Pacific, stated that Motorola-branded phones made out of the company’s assembly plant in Noida, Uttar Pradesh were already being exported to “select markets”.
Earlier this month, a Bloomberg report stated that Xiaomi, Oppo and Vivo, all of which are among the top five smartphone brands in India, are considering the plausibility of exporting smartphones to international markets from India. While Xiaomi is in talks with Dixon to make its phones in India for global markets, Oppo and Vivo – both owned by Chinese tech conglomerate BBK Electronics – are in talks with Indian company, Lava.
However, India still remains dependent on other nations for key components such as semiconductor supplies, as well as raw materials that are imperative in the smartphone manufacturing process. While China still holds a strong footing in this regard, the Indian government has also introduced a Rs 76,000 crore PLI scheme to attract semiconductor manufacturing to the country, earlier this year.
ICEA claims that mobile phones being exported from India are no longer reserved for surplus markets by OEMs, but are being shipped to “some of the most competitive and advanced markets in Europe and developed Asia.”
The growth in mobile phone exports has also been tipped by ICEA to outpace the growth in overall electronics exports from India, which is estimated to rise from $10.6 billion in FY21 to around $15 billion in the current fiscal year.