Smartphones, particularly Apple’s iPhones, have now become India’s top export to the United States, surpassing the value of non-industrial diamonds. This significant shift has taken place over the past three quarters, according to a report by Business Standard.
In the June quarter alone, smartphone exports from India reached a staggering $2 billion, compared to $1.44 billion for non-industrial diamonds. This data comes from the latest figures released by India’s Department of Commerce.
A Trend That Began in Late FY24
The trend started in the December quarter of FY24, when India’s smartphone exports to the US hit $1.42 billion, surpassing diamond exports, which stood at $1.3 billion at the time. This shift continued into the final quarter of FY24, where smartphone exports surged by 43% to $2.02 billion. In contrast, diamond exports saw a decline of 4.6%, dropping to $1.24 billion.
By the September quarter of FY24, smartphones had become the fourth-largest export from India to the US, marking a major transformation in the country’s export profile.
What’s Behind the Surge?
The significant rise in smartphone exports, especially iPhones, can be credited to India’s production-linked incentive (PLI) scheme for mobile devices. This initiative has played a crucial role in boosting smartphone manufacturing and exports.
Before the PLI scheme was introduced, India’s smartphone exports were relatively small. In FY19, the total global smartphone exports from India amounted to $1.6 billion, with only $5 million of that going to the US market.
However, by FY23, the scenario had changed dramatically. Apple exported over $5 billion worth of iPhones from India, contributing significantly to the country’s total smartphone exports, which stood at $11.1 billion. Out of this, more than $2.15 billion worth of smartphones were shipped to the US.
In FY24, India’s iPhone exports skyrocketed to $10 billion, making up 66% of the country’s total smartphone exports, which reached $15.6 billion. During this period, smartphone exports to the US increased by 158%, amounting to $5.56 billion. This made smartphones India’s second-largest export to the US, right behind diamonds. Now, nearly 50% of Apple’s iPhone exports from India are heading to the US market.
India’s Growing Role in the US Smartphone Market
Despite this impressive growth, India still accounts for a relatively small share of the US smartphone import market. In 2022 and 2023, the US imported $66 billion and $59.6 billion worth of smartphones, respectively, mostly from China and Vietnam.
India currently contributes around 10% to the US smartphone import market. However, there’s significant potential for further growth if India can continue to lower costs and improve its competitiveness compared to China and Vietnam.
In conclusion, India’s smartphone exports, driven largely by iPhones, have seen a remarkable rise, but there is still room to expand its presence in the US market. With continued efforts to boost production and reduce costs, India could become an even larger player in the global smartphone export landscape.
