Is India's exports reshaping the DNA of global trade?
How Indian electronics exports reshape the DNA of global trade. ”Indian Zoom News website commented on the 28th. According to the semi annual export data released by the Indian Ministry of Commerce and Industry, the export value of electronic products has increased from 15.6 billion US dollars last year to 22.2 billion US dollars, a year-on-year increase of 42%, and the gap with petroleum products is narrowing. If this trend continues, electronic products are likely to become India's second largest export category after engineering products in a few years.
According to The Times of India, electronic products will still be India's seventh largest export category in the 2022 fiscal year, but in recent years they have surpassed major industries such as jewelry, chemicals, pharmaceuticals, and ready to wear. In the past three years, India's exports of electronic products have increased by 63%. The report cites analysts' predictions that, at the current pace, electronic product exports may double from fiscal year 2023 to fiscal year 2026. According to Indian media, this is a 'new export miracle'.
According to Indian media analysis, the key factor driving the growth of electronic product exports is the government's Production Linked Incentive (PLI) program, which is transforming India from a net importer of smartphones to a net exporter. The Indian newspaper Nagaland Post reported that India's smartphone exports in September were estimated to exceed $1.8 billion, an increase of over 95% compared to the same period last year.
It is worth noting that nearly half of the value of India's electronic product exports comes from the shipment of Apple's iPhone products. According to reports, in the first half of this fiscal year, India exported iPhones worth approximately $10 billion, accounting for about 45% of the country's total electronic product exports and about three-quarters of its total smartphone exports ($13.4 billion). Currently, India has become the second largest Apple smartphone manufacturing base after China.
In contrast to electronic products, the decline of petroleum products stands out in India's export landscape. Zoom News website reported that in recent decades, India's export engine has been mainly driven by petroleum products. Currently, petroleum products are still India's second largest export category, but their export value has been declining, from $97.4 billion in the 2023 fiscal year to $63.3 billion in the 2025 fiscal year. Expert analysis suggests that due to US sanctions leading to the interruption of low-priced Russian crude oil supply, the cost advantage of Indian refineries may disappear, and oil exports may accelerate their decline. In the past few years, despite the cost advantage brought by Russian oil, India's oil exports have continued to decline. Once this advantage no longer exists, exports may suffer a greater blow
In contrast, India's electronics manufacturing industry has made significant progress in the past decade, but there are still several long-standing challenges. Some analysts believe that a challenge for India's electronics manufacturing industry is the heavy reliance on imports for key components, with over 80% of electronic components - from semiconductors and printed circuit boards to advanced displays and lithium-ion batteries - relying on foreign suppliers, mainly from China. This reliance on external sources has pushed up costs, with Indian manufacturers having production costs 10% -20% higher than those in countries such as China and Vietnam. In addition, there is also a gap in India's domestic research and development, as the lack of strong R&D infrastructure limits the country's ability to design and manufacture advanced components.