How electronic goods rose to the third spot in India’s exports, explained in charts

The meteoric rise has come on the back of the government’s efforts to boost electronics manufacturing through a series of financial incentive schemes.

Electronic goods exports clocked $22.2 billion in the first six months of FY26, rising 41.9% year-on-year—the fastest growing among all commodities—and accounted for 10.1% share in India’s total exports, shows data.

The temporary exemption of 50% reciprocal tariffs by the US on the category, the biggest market for India’s electronics goods, also supported the growth. Overall exports to the US declined 13% between April and September this year, but growth in electronic goods exports was over 100% during this period.

The sector, dominated by mobile production, has been on an upward trajectory over the past decade. Electronics clocked $7.6 billion and was ranked 8th among all export commodities in FY17. As the category rose up to the sixth spot by FY22, it left behind old hand commodities such as rice, cotton yarn/handloom products and readymade garments.

It broke into the top five in FY23 and has since dislodged gems and jewellery, drugs and pharmaceuticals, and inorganic/organic/agro chemicals to enter the coveted top three last fiscal. In FY25, electronics exports crossed the $40-billion mark.

A Mint analysis shows the extent to which the sector has outperformed competing commodities. Electronic exports from India have more than doubled in FY25, compared with the preceding five-year average.

Engineering goods and petroleum products, which are India’s top two export categories, rose 20.1% and 0.1% respectively during this period. Drugs and pharmaceuticals, another flagship export commodity, grew 24.1% last fiscal compared to FY20-FY24 average.

India has been upping efforts to boost electronics manufacturing. In 2012, it unveiled the first-ever national policy on electronics (NPE) focussed on domestic manufacturing, improving manpower and export potential. Perhaps, the biggest fillip for the sector came with the Production Linked Incentive (PLI) scheme in April 2020 that offered financial incentives for a five-year period on incremental sales of goods manufactured in India, covering 14 sectors.

While the scheme has shown mixed results for most sectors, mobile phones and certain electronic components have been the highest recipient of the PLI scheme.

Apple stood out as the major player, establishing India as its second-largest iPhone manufacturing base, in its attempts to diversify beyond China. The company’s shipping of iPhones out of India has been the primary driver behind India’s surging mobile phone exports.

Risks ahead

Whether this dream run will last is a question that remains to be answered. The sector faces structural challenges and headwinds that it must contend with.

Telecom equipment, which largely includes smartphones, is the biggest pie in India’s electronics exports. The category has tightened its stranglehold on the electronics sector. The item accounted for 64.1% of total electronics exports in FY25, up from 51% in FY23, indicating further concentration in the category.

With the US, the dominant buyer of India-made smartphones, the success of India’s smartphone export is closely tied to the country. While the sector has escaped Donald Trump’s tariffs tremors till now, the US administration has been pushing companies to reshore manufacturing back home. The stellar growth could come under pressure, experts have warned.

Moreover, globally, smartphone demand is seeing signs of tapering off currently due to tariff-driven economic uncertainty. Shipments increased by 1% in the April-June quarter to 295.2 million units, according to data from research firm International Data Corp, and reported by Reuters. This is slower than the 1.5% growth recorded in the previous quarter.

Lastly, India remains a net importer of electronics goods by a huge margin. While India has aced final assembly, sub-assembly, and exports, in mobile, but it lags in component manufacturing and design, a 2024 report by Niti Aayog pointed out.