iPhone Exports Propel India’s Tech Market Growth

In a remarkable shift, smartphones—led by Apple Inc’s iPhones—have become India’s largest export product to the United States, surpassing the long-dominant non-industrial diamond trade. Recent reports indicate that smartphone exports reached $2 billion in the June quarter alone, compared to $1.44 billion for diamonds, as per data from the Department of Commerce.

A New Era for Indian Exports

This trend began in the December quarter of FY24 when smartphone exports to the U.S. hit $1.42 billion, outpacing diamond exports at $1.3 billion. The momentum continued into the final quarter of FY24, with smartphone exports surging by 43% to $2.02 billion, while diamond exports faced a 4.6% decline, dropping to $1.24 billion.

By the September quarter of FY24, smartphones solidified their position as the fourth-largest export from India to the U.S., highlighting a significant shift in the country’s export dynamics.

Impact of the Production-Linked Incentive Scheme

The explosive growth in smartphone exports is largely attributed to the success of India’s Production-Linked Incentive (PLI) scheme for mobile devices. Before its introduction, India’s smartphone exports were a mere $1.6 billion in global shipments during FY19, with a scant $5 million directed towards the U.S. market. By FY23, Apple alone exported over $5 billion worth of iPhones from India, contributing to a total of $11.1 billion in smartphone exports, with more than $2.15 billion destined for the U.S.

Future Prospects in a Competitive Market

In FY24, iPhone exports skyrocketed to $10 billion, accounting for an impressive 66% of India’s total smartphone exports, which reached $15.6 billion. Exports to the U.S. surged by 158%, totaling $5.56 billion, establishing smartphones as India’s second-largest export to the U.S. after diamonds. Notably, U.S. shipments now represent nearly 50% of Apple’s iPhone exports from India.

However, despite this impressive growth, India’s smartphone exports still capture only about 10% of the U.S. smartphone import market. In 2022 and 2023, the U.S. imported $66 billion and $59.6 billion worth of smartphones, respectively, primarily from China and Vietnam. As India continues to enhance its production capabilities and competitive pricing, there remains significant potential for further expansion in the global smartphone market.