India’s smartphone exports, led by Apple Inc.’s iPhones, have become the largest product export to the United States, outpacing non-industrial diamonds in value. This trend has been observed over the past three quarters, according to a report by Business Standard.
In the June quarter of FY24, smartphone exports reached $2 billion, surpassing non-industrial diamonds, which were valued at $1.44 billion. The report, citing data from the Department of Commerce, highlights that this shift in trade began in the December quarter of FY24 when smartphone exports to the US reached $1.42 billion, compared to diamond exports, which stood at $1.3 billion. By the final quarter of FY24, smartphone exports witnessed a 43 percent increase quarter-on-quarter, totaling $2.02 billion, while diamond exports saw a decline of 4.6 percent to $1.24 billion.
Although these figures provide a clear picture of changing trade dynamics, Moneycontrol was unable to verify the data independently.
The rise of smartphone exports has positioned smartphones as the fourth-largest product export from India to the US by the September quarter of FY24. This surge, particularly in iPhone exports, is attributed to the success of India’s production-linked incentive (PLI) scheme, which has been instrumental in boosting mobile device manufacturing and exports.
Before the PLI scheme, India’s smartphone exports were relatively modest. In FY19, the country’s total global smartphone exports amounted to $1.6 billion, with only $5 million of that destined for the US. However, the introduction of the PLI scheme significantly transformed India’s mobile manufacturing sector, particularly benefiting Apple.
By FY23, India’s smartphone exports, led by iPhones, saw a dramatic rise. Apple alone exported over $5 billion worth of iPhones from India during this period. This substantial growth played a key role in India’s overall smartphone exports, which reached $11.1 billion in FY23. Of that total, over $2.15 billion worth of smartphones were exported to the US.
The success continued into FY24, where iPhone exports from India surged to $10 billion. These exports accounted for 66 percent of India’s total smartphone exports, which amounted to $15.6 billion. During this period, smartphone exports to the US increased by a staggering 158 percent, totaling $5.56 billion. This made smartphones the second-largest export from India to the US, with diamonds still holding the top spot for now. In addition, almost 50 percent of Apple’s iPhone exports from India are now directed to the US.
This remarkable growth in iPhone exports to the US is seen as a reflection of Apple’s growing reliance on India as a manufacturing hub, supported by government initiatives like the PLI scheme. As Apple continues to diversify its supply chain away from China, India’s role in global smartphone production has become more prominent.
Despite this impressive growth, India’s share of the US smartphone import market remains relatively small. In 2022, the US imported $66 billion worth of smartphones, while in 2023, this figure dropped to $59.6 billion. Additionally, the US imported $55 billion worth of laptops and tablets in 2022 and $46.3 billion in 2023, with the bulk of these electronics coming from China and Vietnam.
India’s smartphone exports account for approximately 10 percent of the US smartphone import market. While this represents significant growth for India’s mobile device industry, there is still considerable room for expansion. To increase its share of the US market, India will need to continue lowering production costs and improving its competitiveness against established manufacturing giants like China and Vietnam.
The success of the PLI scheme has shown that India has the potential to be a significant player in the global smartphone market. However, it remains to be seen whether India can maintain this momentum and further increase its share of the US market. The next few years will be crucial for India’s smartphone industry as it navigates challenges related to production costs, global competition, and evolving consumer demand.
India’s focus on bolstering its electronics manufacturing sector through the PLI scheme has already yielded impressive results, and the continued growth of smartphone exports to the US is a testament to the effectiveness of these efforts.
The shift in trade patterns, with smartphones overtaking diamonds as India’s largest export to the US, marks a significant milestone in India’s trade relationship with the US. As smartphone exports continue to rise, India may soon see further growth in other electronics categories, contributing to the country’s broader goal of becoming a global electronics manufacturing hub.
India’s ability to compete with China and Vietnam in the electronics space will depend on how well it can scale production, reduce costs, and maintain quality. Given the rapid rise of smartphone exports to the US, India’s mobile manufacturing sector is poised for further growth. However, sustaining this upward trajectory will require ongoing investment in infrastructure, technology, and skilled labor.
Smartphones, particularly iPhones, have become a dominant force in India’s export portfolio to the US. This success has been fueled by the PLI scheme, which has helped India become a key manufacturing base for Apple’s global supply chain. Withnearly half of Apple’s iPhone exports from India now heading to the US, the future looks bright for India’s smartphone industry, though challengesremain in expanding its share of the competitive US market.
As India’s smartphone exports continue to rise, the country will need to focus on enhancing its production capabilities and maintaining its competitive edge in a global market dominated by China and Vietnam. The next phase of growth will be critical for India as it seeks to further establish itself as a global player in the electronics manufacturing space.