Electronics is one of the fastest developing industries globally. Electronic products have significantly impacted and shaped the lifestyle of the people of India in the digital world. The digital push stimulated by the COVID-19 pandemic is expected to fuel the demand for electronic devices worldwide. Furthermore, the adoption of electronic devices is estimated to increase steadily and continue to be one of the major global economic drivers.
The global electronics industry size was projected at US$ 2.9 trillion in 2020. For the purpose of evaluation, this industry is almost equal to the size of the most rapidly developing economy in the world, i.e., India.
The global market size of major product segments in 2020-21 (US$ billion)
Source: Press Information Bureau
India is one of the leading players when it comes to cell phone exports by country. The country aims to accomplish the production of electronics worth US$ 300 billion by FY 2026; manufacturing mobile phones will be the key to achieving India's ambitious goal.
India's telecommunication sector has proven to be the backbone for accomplishing numerous pillars of the Digital India programme. Crucial reforms and initiatives undertaken by the government have strengthened the sector, as gauged by the rise in mobile connections in the country. As of October 2020, total mobile connections in India stood at 1,151.73 million, making it one of the fastest-growing mobile networking countries in the world.
Mobile Phone Exports From India
India's electronic goods exports surged by approximately 88% from US$ 6,600 million in FY 2013-14 to US$ 12,400 million in FY 2021-22. Mobile phones, consumer electronics, IT hardware, auto electronics and industrial electronics were the key products exported from India. Mobile phones represented a major portion of India's electronics goods exports. According to the mobile phone export data from India, in 2021, India's mobile phone exports reached US$ 4.14 billion, a testament to the country targeting US$ 300 billion goal by FY 2026.
Between April-September 2021, mobile phone exports surged to US$ 1.7 billion, while imports decreased significantly.
According to the World Bank's mobile subscriptions statistics, mobile cellular subscriptions increased phenomenally to 106 per 100 people in 2020 from 12 in 2000.
Global mobile cellular subscriptions (per 100 people)
Source: The World Bank
As the number of cellular subscriptions rises, demand for mobile phones will also surge, leading to an increase in manufacturing and exports. With its rich demographic dividend, emerging talent pool, increase in skilled labour and favourable government schemes, India would grow to become one of the leading export destinations of the world.
The central government has taken various steps to increase the domestic production and export of electronic devices, positioning India as a global market for mobile phones. Frameworks under the Department of Commerce are being examined to eliminate outdated provisions and redundancies. The government is pursuing multiple bilateral trade agreements, and it is committed to branding each district in India as an export hub through programmes such as One District One Product. In addition, the government has cushioned exporters through numerous exported-oriented schemes. Decriminalisation and rationalisation would reduce the compliance burden and expand the ease of doing business. Some of the crucial government initiatives are listed below:
Smartphone Exports Rise in India
Globally recognised companies such as Foxconn, Samsung, Hon Hai, Rising Star, Pegatron and Wistron view India as a potential market to expand their smartphone manufacturing capabilities. Foxconn, Wistron, Pegatron and Samsung have inked the PLI scheme with the government to make India a global electronics hub. Furthermore, Foxconn, Wistron and Pegatron submitted applications for a US$ 6.65 billion scheme to enhance local smartphone production. According to the proposal, Lava, Samsung, iPhone's contract manufacturers and Dixon target to manufacture components and mobile devices worth more than Rs. 11 trillion (US$ 137.9 billion) in the next five years. Apple and Samsung cover approximately 60% of the global handset market in high- to medium-price segments. Such companies will support India's mobile phone export growth with their robust presence and impeccable market share. The PLI scheme is believed to have the potential to add US$ 520 billion in the next five years, thereby making the electronics manufacturing sector a game changer for the Indian economy. The government has constantly been working with the industry to enhance the value of marketing India's exports to improve India's global position as a reliable supplier. Active measures have been taken to align with the global value chain.
The Road Ahead
India has the potential to become one of the largest exporter of mobile phones in the world. Export value of mobile phones in India are likely to rise leading to a surge in demand. Moreover, the demand for smartphones is estimated to surge manifold by 2025 resulting in an increase in domestic production due to the PLI scheme and favourable government initiatives, which are likely to brand India as a competitive land for electronics manufacturing. Creating domestic winners in the electronics manufacturing segment will flare the “Vocal for Local” movement while scaling global operations. Under the Digital India and Make in India initiatives, India witnessed an unprecedented rise in electronics manufacturing in the past few years. The COVID-19 pandemic fuelled the intensity of digitisation in the world. The NEP will position India as a global hub by focusing on scale and size and marketing exports and boosting domestic value addition by building and supporting an environment for the industry to compete globally.