Record phone exports augur well, but challenges remain

EXPORTS of mobile phones from India clocked more than $3.09 billion last month, marking a success for the government’s Production Linked Incentive (PLI) scheme. The export figure for May — an increase of 74 per cent over the same month last year — was the second-highest ever. The peak of $3.1 billion was achieved in March when Apple exported more phones to the United States to avoid penal tariffs from April. Even shipments of Android phones have witnessed a strong growth. Smartphone exports rose to $24.14 billion in 2024-25 from $15.57 billion in 2023-24. Electronics is now the fastest-growing export category. Today, 99 per cent of the phones that India consumes are assembled in the country. Much of this scaling up can be attributed to the PLI scheme, but a larger question looms — can India go beyond smartphone assembly?

Launched in 2020 with an aim to invite global supply chains to expand capacity, the PLI scheme has played a transformative role. It has managed to draw in foreign investments and placed India among the key players in the global electronics value chains such as China and Vietnam. The goals of keeping up the momentum and taking a big step forward from being just an assembly shop, are facing new challenges. A tough test is negotiating the global trade dynamics ever since Donald Trump took over as the US President for a second term. A bigger task is manufacturing components, the DNA of electronics, which are still largely sourced from China, South Korea and Taiwan. An incentivisation scheme launched in April provides an opportunity, but the complexities involved would require consistent handholding.

Amid the grand plans, it’s vital to address the fundamental concerns of the manufacturing ecosystem — lack of infrastructure and an inadequately skilled workforce.

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