Electronics despatches jumped 52.4% on year until December this fiscal to a record $16 billion, defying a contraction in many export segments in recent months, supported by the production-linked incentive (PLI) scheme for smart phones. Official sources expect such exports to continue to perform well in the coming months and cross $20 billion for the first time in FY23.
Elevated exports will somewhat drag down electronics trade deficit this fiscal from a record $56.2 billion in FY22, the first annual reduction since FY20, although the deficit will still remain high, said the sources. Current account deficit in FY23 is projected to jump to 3-3.5% of GDP, against 1.2% a year before.
Growth in electronic exports remained way above that of 10.3% in the overall merchandise supplies until December this fiscal. In fact, electronics exports in the first nine months of FY23 have exceeded the level ($15 billion) witnessed in the entire FY22. Meanwhile, electronics imports rose 12.6% to $55.5 billion until December this fiscal.
Electronics have remained the second-biggest contributor to the country’s overall merchandise trade deficit, after oil & petroleum products, and exacerbated pressure on the current account at a time when a spike in oil prices has already inflated the import bill.
While electronics exports surged 41% last fiscal from a year before to $15 billion, imports jumped 35.4% to $71.2 billion.
Exports of electronics were driven by a 73.9% jump in the telecom instrument segment, which includes mobile phones, to $8.8 billion, or over a half of the country’s overall electronics despatches until December. As FE had recently reported, smartphone exports breached the Rs 60,000-crore mark in the first nine months of this fiscal, having shot up by 100% from a year before. Apple has contributed nearly 50% of the Rs 60,000-crore exports thus far.
The main contributors to this massive growth are the three Apple contract manufacturers — Foxconn, Pegatron (both located in Tamil Nadu) and Wistron (located in Karnataka) – and Samsung. The key export markets for smart phones are the UAE, Russia, the UK and The Netherlands.
Between April and December, exports of consumer electronics climbed 56.3% to $0.9 billion, while those of electronics instruments and electronics components rose 26.7% and 33.1%, respectively, to $3.1 billion and $2.9 billion. Computer hardware and peripherals exports rose 31.9% to $375 million.
Imports of electronics were driven by a 9.6% rise in electronic components to $18.3 billion until December this fiscal, while purchases of consumer electronics climbed 40.2% to $5.7 billion. Imports of electronics instruments and telecom instruments rose 21.1% and 12.7%, respectively, to $8 billion and $12.1 billion.