Smartphone exports could reach $9 billion in 2023 with more headroom for growth, given that a fourth of all iPhones may be manufactured here
India appears close to a bumper Apple harvest whereby a fourth of all iPhones may carry the Made in India marking. This could significantly boost the country’s smartphone exports, which is estimated to touch $9 billion during the current fiscal year. This number stood at $5.8 billion in FY22 with the spike largely resulting from the government’s PLI scheme.
The country’s overall electronics manufacturing goal has been set at $300 billion by 2026-2027, with local manufacture contributing $87 billion in the last fiscal year. According to the India Cellular and Electronics Association (ICEA) expects this number to touch $100 billion by end-March 2023.
Smartphone exports have already breached the $5 billion mark over the first seven months of this fiscal year, which was double the numbers it clocked a year ago. With the likes of Apple and Samsung adding local production with their exports, this number could soon touch $9 billion by the end of the current fiscal year.
Can we expect a bumper Apple harvest?
In fact, things may just get better on the Apple front, with India emerging as a major hub for the iPhones outside of China. Industry sources believe that the company may eventually outsource between 20% to 25% of the total iPhone output to India over the next three to four years. As it stands, only 5% of total iPhone manufacturing is done in India.
Close on the heels of the central government launching the production-linked incentive (PLI) scheme worth Rs.41,000 crore, Apple’s major contract manufacturers, Foxconn, Wistron and Pegatron, have already ramped up production and exports. The company accelerated its plans to shift from China following the supply chain disruption during the Covid lockdowns there.
Electronics export target of $300 billion is achievable
Minister of State for Electronics and IT Rajeev Chandrasekhar said the $300 billion electronics export target was fixed in consultation with the industry representatives back in 2021 with a key factor being a targeted approach to ramp up exports from around $20 billion now to about $120 billion by end of FY26.
Smartphone exports, which could touch $9 billion by end-March 2023, are targeted to reach $60 billion by the end-March 2027. Though this growth target appears quite stiff, the fact is that India’s electronics goods exports during the first six months of the current fiscal year showed a 54% growth to $10.2 billion from $6.5 billion a year ago.
Officials in the IT ministry and Commerce ministry are confident of meeting these targets due to the increased interest among various states to participate in this manufacturing opportunity, which ensures creation of several thousand new jobs. On its part, the Center is coordinating with the states to streamline processes and remove bottlenecks.
Half of all iPhones could be made in India
As for Apple’s lofty goals, analyst Ming-Chi Kho had tweeted last month about how Foxconn could be the first to accelerate its capacity expansion plans in India. The company, which runs the world’s largest mobile manufacturing plant in China’s Zhengzhou province, could contribute substantially to a 150% growth in India’s iPhone manufacture by 2023.
Kuo said this could result in Apple meeting its medium to long term goal of shipping 40-45% of all iPhones from India. However, not all seem to accept this number, with JP Morgan saying in a report that at best Apple could shift one-fourth of its iPhone production to India by 2025.
Whatever be the actual numbers, the fact remains that India could be on the verge of a bumper Apple harvest in the near future.