India's smartphone exports expected to reach $9-10 billion in FY23

Mobile phone exports are likely to reach between $9 billion and $10 billion levels in value in FY23, said industry insiders and experts, which is set to be a significant jump from ₹45,000 crore worth of phones exported in FY 22.

Over the last couple of months, exports have been touching $1 billion a month, and the trend is likely to continue over the coming quarter, a senior industry executive said, adding that large majority of exports by value were being done by Samsung and Apple.

“Last year, smartphone exports were at ₹45,000 crore, this year, we’ve already crossed that number and doing roughly $1 billion a month. At this rate, we should be able to reach $9 billion this year,” said Pankaj Mohindroo, chairman of the Indian Cellular and Electronics Association that represents handset makers in the country.

According to data from Counterpoint Research, from January to November this year, exports have risen by 23% on-year, and a double-digit growth rate is likely to continue for the remaining months as well, on the back of production linked incentives being offered by the government.

“The key contributor to the rise in exports has been the PLI scheme which has benefitted manufacturers and brands and has pushed the overall manufacturing ecosystem,” said Prachir Singh, senior analyst with Counterpoint Research.

The rise in exports comes at a time when India-made smartphone shipment declined for the first time, by 8% on-year in the July-September, to reach over 52 million units, largely due to waning consumer demand amid economic headwinds and market uncertainties due to geopolitical changes, as per Counterpoint data.

In India’s smartphone manufacturing ecosystem 63% of shipments coming from in-house manufacturers and 37% from third-party electronics manufacturing service providers such as Bharat FIH, which makes for Xiaomi and Dixon Technologies which also makes for Samsung. OPPO had the largest share of made in India smartphone shipments with 24% share, followed by Samsung and Vivo. Oppo makes phones for its own brand OPPO, Realme and OnePlus.

“We will continue to see PLI disbursements in subsequent quarters, which will add to the local manufacturing landscape. Overall, the manufacturing trend is witnessing an upward trajectory with multiple partnerships happening in recent months, like the ones between Tata Group and Wistron and between Foxconn and Vedanta,” analysts at the firm said in a note on Tuesday.

The government’s PLI scheme for mobile phone manufacturing has been a big success with large brands like Apple, Samsung and Motorola having benefitted from it. According to government data, 31 companies are expected to produce electronics worth ₹10 trillion with an investment of ₹10,818 crore over five years. India’s policies have been consistently giving a push to local manufacturing, exports as well as making the country an important player in the global supply value chain.

“This year we are expecting exports to close around 25 million units of phones valuing over $7 billion,” said Faizal Kawoosa, founder of research firm TechArc, giving a more conservative outlook.

“Exports of mobiles from India is of immense opportunity with lot of growth and scale. However, there is a need of very proactive support from government beyond PLI like swift clearance of exports, etc. With 5G upgrade taking place globally it’s a good opportunity for exponential exports growth,“ said Faizal Kawoosa, founder of research firm TechArc.

Counterpoint’s data showed that Samsung was the largest exporter with 76% share of exports, followed by Apple with 16% and Motorola with 3% share by volume or units of exports. In the period of January-November 2021, Apple’s share has more than doubled from 7% of the exports while Xiaomi which had a 8% share of exports did not figure in the top three export brands.

Navkendar Singh, associate vice-president, devices research at IDC India said that Samsung’s share of exports by value would still be far higher than Apple’s owing to the sheer volumes of smartphones it exports, even though the average selling price was over $1000 apiece.