Trade deficit in electronics hit a record $56 billion in FY22, as both imports and exports scaled fresh peaks, adding to pressure on the country’s current account at a time when a spike in oil prices has already inflated the import bill.
Electronics have remained the second-biggest contributor to the country’s overall merchandise trade deficit, after oil & petroleum products.
While electronics exports surged 41% last fiscal from a year before to $15 billion, imports jumped 35% to $70.8 billion, according to the commerce ministry data. Earlier, trade deficit had hit a record of $47 billion in FY19.
However, the deficit is going to narrow in the coming years, as exports will continue to rise at a faster pace, riding various production-linked incentive schemes announced for the sector, a senior government official told FE.
A substantial part of the imports in FY22, said the official, comprised electronics components and that growth in purchases of telecom instruments, including mobile phones, is negligible. This also means domestic value addition is rising.
Electronics components alone witnessed a 67% surge in imports to $25.6 billion in FY22, while imports of computer hardware and peripherals jumped 45.4% to $15.2 billion. Similarly, imports of consumer electronics climbed 27.7% to $5.8 billion, while those of electronics instruments and telecom instruments rose 21.4% and 2.3%, respectively, to $9 billion and $15.2 billion.
Similarly, exports of electronics were driven by a 66% jump in the telecom instrument segment, which includes mobile phones, to $7.4 billion, or nearly a half of the country’s overall electronics supplies last fiscal. Exports of consumer electronics climbed 33% to $0.9 billion, while those of electronics instruments and electronics components rose 17.5% and 23%, respectively, to $3.3 billion and $3 billion. Computer hardware and peripherals exports rose 32% to $415 million last fiscal.