India phone exports more than doubled on-year to 3.6 crore units in FY19-20

NEW DELHI: India’s phone exports for FY19-20 stood at 3.6 crore units, or more than double the previous year’s 1.7 crore units, according to data released by ministry of commerce on Wednesday.

“We have attracted interest from companies such global giant Samsung and Chinese OEMs in the mobile phone segment coupled with the right set of incentives for them,” said Faisal Kawoosa, founder and chief analyst, TechArc.

“The mass domestic market, which was underpenetrated for long, has provided an opportunity to these players to address local demand as well as set-up base here,” he added.

In terms of value, the on-year growth in exports last fiscal year ended March 31 was 91% with India exporting devices worth Rs 21,000 crore. Exports have surged from 20 lakh units in FY16-17.

Correspondingly, imports in the category last FY plunged 81% to 20 lakh from 2.6 crore in the previous fiscal. Phone imports have fallen from 7.5 crore units in FY16-17.

The data is mentioned under the category ‘Telephones for cellular or for other wireless networks’ which includes feature phones, smartphones, and phone assembly parts as well as other components such as chargers. Almost 90% of this number accounts for finished devices, analysts said.

India’s local production has been increasing with sops for local manufacturing encouraging the likes of Apple, Xiaomi, Oppo, Vivo, OnePlus, Realme and Samsung to either up up or expand local manufacturing in India, and also export from the world’s second largest smartphone market.

The industry has largely benefited from the ‘Make in India’ initiative by the government- the most effective being the Merchandise Export Incentive Scheme (MEIS).

Under MEIS, the government provides duty benefits of upto 4% depending on exported product and country. Rewards under the scheme are payable as percentage of realized free-on-board value and, MEIS duty credit scrip can be transferred to the company for working capital needs or used for payment of various duties such as basic customs duty.

This incentive will be increased to between 4% and 6%, applicable from August 1 this year, under the new production-linked incentive which has a budgetary outlay of Rs 41,000 crore, according to the government.

India’s contribution to the global smartphone market has risen from 9% in 2016 to 16% 2019 as major handset makers diversify to countries other than China.

China has been losing lustre as world’s phone factory as the supply chain and production ecosystem has been steadily shifting abroad due rising costs, trade tensions with the US, and a re-prioritization of other consumer markets, research firm Counterpoint had said in a report.

As per government data, India has around 270 factories making handsets and components.

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