India Surges in Mobile Phone Exports, Catching Up with China and Vietnam

India is rapidly narrowing the gap with China and Vietnam in mobile phone exports, with a notable surge in FY24. According to global trade data, while China and Vietnam experienced declines of 2.78% and 17.6% respectively in their mobile phone exports, India’s exports soared by 40.5%.

India has captured nearly 50% of the reduction in mobile phone exports from China and Vietnam, indicating a significant shift in the global supply chain. Officials attribute this success to the country's smartphone production-linked incentive (PLI) scheme, which was designed to capitalize on the supply chain shift from China. “The smartphone PLI scheme was announced with an objective to capture supply chain shifts from China. The results are beginning to show now”, an official stated on condition of anonymity. Although China remains the leading exporter of mobile phones, India is making substantial progress.

Data from the International Trade Centre (ITC) reveals that Chinese mobile phone exports decreased from $136.3 billion in FY23 to $132.5 billion in FY24, reflecting a $3.8 billion decline. Similarly, Vietnam’s mobile phone exports dropped from $31.9 billion in FY23 to $26.27 billion in FY24, a $5.6 billion decrease. The combined reduction in exports from these two countries totaled $9.4 billion.

Conversely, India’s mobile phone exports surged from $11.1 billion in FY23 to $15.6 billion in FY24, 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 noted.

The rise in India's mobile phone exports is seen as a significant achievement for the government, especially amid geopolitical tensions with China. The Indian government has been strategically attracting companies adopting the China+1 approach to diversify their supply chains and manufacturing operations.

The smartphone PLI scheme has notably benefitted Apple, which has established India as its second base for iPhone manufacturing after China. Since the PLI scheme's inception in 2020, Apple has ramped up its production and exports from India. Apple’s vendors, including Foxconn, Pegatron, and Wistron (now owned by Tata), have set up factories in the country under the scheme. Production by Apple’s vendors increased from $7 billion in FY23 to $14 billion in FY24, while exports rose from $5 billion to over $10 billion in the same period. iPhone exports now account for 65% of India’s mobile phone exports and over one-third of India’s electronics exports, which surpassed $29 billion in FY24.

Samsung is also poised to expand its mobile phone exports from India. The South Korean company, a beneficiary of the PLI scheme, exported approximately $3.5 billion worth of mobile phones from India in FY24, a figure that is expected to grow. Samsung is currently the largest exporter of mobile phones from Vietnam, having invested $20 billion in the country by late 2023, according to a report by the Vietnam News Agency. Over 50% of Samsung’s global sales come from products made in Vietnam.

India’s success in increasing mobile phone exports is a testament to the effectiveness of the PLI scheme and the country's growing role in the global electronics supply chain. As India continues to attract major global manufacturers and enhance its production capabilities, it is well-positioned to further challenge China and Vietnam in the mobile phone export market.