In the fiscal year 2024, India was responsible for assembling iPhones valued at $14 billion, which represents 14 per cent of Apple’s worldwide production of the device. This information was highlighted in the Economic Survey, which referenced data from external sources.

The production of Apple’s mobile phones has commenced in the Indian states of Karnataka and Tamil Nadu through Foxconn’s facilities.

The Economic Survey noted a positive trend in India’s electronics export capabilities, with the country’s global export share rising from 0.63 per cent in 2018 to 0.88 per cent in 2022. Consequently, India’s position in the global electronics export rankings improved from 28th to 24th over the same period. Furthermore, the proportion of electronic goods in India’s total merchandise exports increased from 2.7 per cent in the fiscal year 2019 to 6.7 per cent in the fiscal year 2024.

Since 2014, India’s electronics manufacturing industry has seen substantial growth, securing approximately 3.7 per cent of the global market share by the fiscal year 2022. This sector also contributed 4 per cent to the nation’s Gross Domestic Product (GDP) in the same fiscal year.

The survey reported a significant rise in the domestic production of electronic goods, reaching ₹8.22 lakh crore, while exports escalated to ₹1.9 lakh crore in the fiscal year 2023. These figures underscore India’s emergence as a prime location for investment in this domain, with considerable expansion in manufacturing capacities over the past five years.

Smartphone manufacturing is identified as a pivotal industry in leveraging the geopolitical shift among global corporations towards a ‘China plus one’ strategy. The survey emphasized the electronics sector’s focus on smartphone production and assembly, with the Indian government’s Production Linked Incentive (PLI) scheme playing a crucial role in drawing investments. The scheme’s incentives, including tax reliefs and subsidies, alongside the increasing domestic demand for smartphones, are significant factors influencing corporate investment decisions in India.

Although India may not immediately benefit from the shift in trade away from China, the survey observed a marked increase in the country’s electronic exports, propelled by the PLI scheme’s implementation. For example, electronic exports from India to the United States have gone from a trade deficit of $0.6 billion in the fiscal year 2017 to a trade surplus of $ 8.7 billion in the fiscal year 2024, indicating a notable enhancement in value addition.

A study by the Centre for Development Studies, cited in the survey, revealed a substantial rise in domestic value addition (DVA), employment, and remuneration within the mobile manufacturing sector since the fiscal year 2017. The DVA’s share in mobile phone production increased from an average of 8.7 per cent during Phase 1 (FY’17 to FY’19) to 22 per cent in Phase 2 (FY’20 to FY’22), reflecting a significant uptick in local involvement.

While the DVA’s ratio to exports might be modest, the survey suggested that integration into global value chains (GVC) enhances the overall value added due to the economies of scale achieved in manufacturing for the extensive global market.

The survey also highlighted the tripling of the direct workforce in mobile phone production from the fiscal year 2017 to the fiscal year 2022, with a notable positive impact on female blue-collar workers. Between Phase 1 and Phase 2, wages and salaries saw a 317 per cent increase.

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