India emerges as a strong contender in smartphone exports amidst China's decline
- In Reports
- 10:37 PM, Jul 02, 2024
- Myind Staff
In response to surging US sanctions and restrictions on Chinese tech products, China's export sector, particularly in smartphones, has faced significant setbacks. Companies like Huawei have been barred from key markets, prompting a shift in global supply chains. Recent data from the Economic Times revealed a notable shift- while China and Vietnam experienced declines of 2.78% and 17.6%, respectively, in smartphone exports during the fiscal year 2024, India saw a remarkable surge of 40.5%. This surge amounted to $15.6 billion in exports, nearly offsetting half of the combined export reductions of China and Vietnam.
India's success is possible because of initiatives like the smartphone Production-Linked Incentive (PLI) scheme, aimed at attracting manufacturing shifts from China. This initiative has clearly yielded tangible results, positioning India as a competitive player in the global mobile phone supply chain.
Despite retaining its position as the leading mobile phone exporter, China has seen decline from $136.3 billion to $132.5 billion in FY24 which is a major shift in global dynamics. Similarly, Vietnam saw its exports decrease from $31.9 billion to $26.27 billion, highlighting India's accelerating ascent in the smartphone export market.
The International Trade Centre's data further emphasises these trends, signaling India's growing influence and competitiveness in the global tech manufacturing landscape. As India continues to capitalise on these opportunities, analysts foresee further disruptions in the global supply chain dynamics, with implications reaching far beyond the mobile phone industry.
The combined $9.4 billion reduction in mobile phone exports from China and Vietnam differs largely from India's remarkable growth. From $11.1 billion in FY23 to $15.6 billion in FY24, India's mobile phone exports surged by $4.5 billion, marking a growth rate exceeding 40%. This surge poses India as the recipient of nearly half of the total decline in mobile phone exports from China and Vietnam, underscoring its growing influence in the global market. Analysts view this as a major achievement for India, especially amid heightened geopolitical tensions with China.
India's active stance in promoting a China+1 strategy has been important in attracting global manufacturers looking to diversify their production bases. At its core, this strategy is the Production-Linked Incentive (PLI) scheme, which has seen large participation from industry giants like Apple.
Under this scheme, India has become Apple's second-largest manufacturing hub for iPhones globally, after China. The PLI scheme's impact is evident in the impressive growth of Apple's production and exports from India. Data reported by Apple's vendors to the Ministry of Electronics and Information Technology (MeitY) has indicated a doubling of production from $7 billion to $14 billion, with exports rising from $5 billion to over $10 billion between FY23 and FY24.
It is to be noted that iPhone exports now constitute 65% of India's $15.6 billion mobile phone export total, contributing significantly to India's electronics exports exceeding $29 billion in FY24. This growth highlights India's successful strategy to capture a major share of the global supply chain realignment from China, strengthening its position as a major player in the international mobile phone market.
As India continues to expand its manufacturing capabilities and attract further investments under the PLI scheme, experts expect continued growth and diversification in the country's export portfolio, further growing its role in the global tech industry.
Image source: Reuters
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