Economic Survey 2024: 14% Of All iPhones Across The World Are Now Produced In India. Here's What's Driving The Growth

iPhone production facilities in Karnataka and Tamil Nadu, operated by Foxconn, have been pivotal in this expansion.

India's electronic exports to the US shifted from a $0.6 billion trade deficit in FY17 to an $8.7 billion trade surplus in FY24.

Source : Apple

Apple has significantly increased its iPhone assembly operations in India, with the country now accounting for 14 per cent of the company's global iPhone production in the fiscal year 2023-24, according to the Economic Survey 2023-24 presented in Parliament on Monday. The survey, introduced by Finance Minister Nirmala Sitharaman, highlighted the remarkable growth in the mobile phone segment of India's electronics sector.

Exports to the US surged from $2.2 billion in FY23 to $5.7 billion in FY24. Data from third-party sources indicated that Apple assembled $14 billion worth of iPhones in India during FY24.

Production facilities in Karnataka and Tamil Nadu, operated by Foxconn, have been pivotal in this expansion.

India Climbs Electronics Export Ranks

India's global electronics export ranking improved, moving from the 28th position in 2018 to 24th in 2022. The country's share in world electronics exports increased from 0.63 per cent in 2018 to 0.88 per cent in 2022. Electronics goods now constitute 6.7 per cent of India's merchandise exports, up from 2.7 per cent in FY19.

Since 2014, India's electronics manufacturing sector has seen significant growth, contributing 3.7 per cent to the global market share and 4 per cent to the national GDP in FY22. Domestic production of electronic items soared to Rs 8.22 lakh crore, with exports reaching Rs 1.9 lakh crore in FY23.

'China Plus One'

The Economic Survey emphasised the strategic importance of the smartphone manufacturing sector in light of the "China plus one" strategy, which many global companies are adopting. The Production Linked Incentive (PLI) scheme, offering tax breaks and subsidies, has been a key driver in attracting investment to India. Increased domestic demand for smartphones has further bolstered this growth.

While India may not yet be the primary beneficiary of the trade shift away from China, the PLI scheme has notably enhanced the country's electronic exports. For example, India's electronic exports to the US shifted from a $0.6 billion trade deficit in FY17 to an $8.7 billion trade surplus in FY24, demonstrating significant value addition.

A study by the Centre for Development Studies, referenced in the survey, shows substantial increases in domestic value addition, employment, wages, and salaries in the mobile manufacturing segment since FY17. The domestic value addition in mobile phone output rose from an average of 8.7 per cent during FY17-FY19 to 22 per cent in FY20-FY22, highlighting increased local participation.

Despite a lower ratio of domestic value addition to exports, participation in global value chains has enhanced overall value through economies of scale. The direct workforce in mobile phone production has more than tripled from FY17 to FY22, with notable benefits for female blue-collar workers. Wages and salaries saw a 317 per cent increase from phase one to phase two of this period.

(With inputs from PTI)