Despite domestic manufacturing efforts, India’s electronic goods imports exceeded $20 billion for the fifth consecutive quarter, with components making up over half, prompting calls for another PLI scheme.
India’s import of electronic goods exceeded $20 billion for the fifth consecutive quarter, From April to June 2024-25. According to a report by the Business Standard, electronic components and computer hardware made up over half of these imports during the June quarter, up from 46% before the pandemic.
It was reported that India imported $22.8 billion worth of electronic goods in the first quarter of this financial year, slightly down from $23.4 billion in the previous quarter. However, compared to the same period last year, imports of electronic goods grew by 12% in the first quarter of FY25.
Electronic goods represent over 20% of India’s total import bill. The goods include computer hardware, consumer electronics, electronic components, electronic instruments, and telecommunications equipment.
Electronic components, essential for mobile phone assembly in India, include high-value items like chips, display modules, and camera components. Despite an increased push for domestic manufacturing, India has remained reliant on these imports. Experts have suggested that a well-structured production-linked incentive (PLI) scheme for components could help address this dependency.
Tarun Pathak, Research Director at Counterpoint Research, noted that while 15% of the value of assembled mobile phones is now sourced locally, this was only 3-4% a decade ago. He advocated for a similar PLI scheme for components to boost local production.
India introduced the PLI scheme in April 2020 to promote local manufacturing in the mobile phone sector, which has led to increased exports. A similar scheme for IT hardware was launched in 2023.
The report stated that in the June quarter of FY25, India also imported over $4 billion in telecom equipment and $1.1 billion in consumer electronics. However, the share of consumer electronics and telecom instruments in total imports has decreased to 24% from around 33% in FY19.
Ankit Jain, Vice President and Sector Head at ICRA, mentioned that most telecom equipment imports come from companies like Ericsson and Nokia. Despite recent efforts to boost localised manufacturing, the sector still faces challenges in meeting the needs of large telecom companies.
As per the Business Standard, Electronic goods remain the third-largest category in India’s import bill, with import growth second only to crude oil.
