iPhone export crosses $10 billion under PLI scheme

The American company Apple exported a record $10 billion iPhone from India in 2023-24 under the Production Linked Incentive Scheme(PLI). This is almost double last year's exports. The iPhone export is the largest ever export of a single branded product by any company from India.

Under the PLI scheme, electronic companies have an export target.

Export of Apple iPhone from India

• Under the PLI scheme, electronic companies have an export target.
• Apple's export target under PLI was $10 billion, to be achieved by 2024-25. Apple achieved the target one year earlier, in 2023-24 itself. 
• iPhone exports accounted for 70 per cent of Apple's total production in 2023-24. 
• Of the three iPhone suppliers in India, the highest contribution was Foxconn. Foxconn exported 60 percent of its total iPhone production in 2023-24. Its other supplier, Pegatron, exported 74 per cent of its total production and Tata Electronics, owner of Wistron, exported 97 per cent of its total production.
• In the financial year 2023-24, the cumulative export target under the PLI scheme for the three suppliers was $7.2 billion.
• India's total mobile phone exports are expected to cross $15 billion in 2023-24. Apple is the largest exporter, contributing around two-thirds of the total exports.

Manufacturer of iPhone in India 

Apple does not manufacture its phones or tablets. Apple mainly designs its products and builds software that runs its digital devices. Apple outsources its hardware from different vendors.

There are three manufacturers of iPhones in India. 

Apple started contract manufacturing its phone in India in 2020. Foxconn was the first company to start iPhone production in India. The largest producer of iPhones in India is the Taiwanese company Foxconn. Around 67% of the iPhones produced in India are made by Foxconn.

Another Taiwanese company, Pegatron, contributes to the total iPhones manufactured in India is 17%

The only Indian company which manufactures iPhones in India is Wistron. The Wistron company was acquired by Tata Electronics in 2023. Tata Electronics is building up Apple’s largest assembly plant in Hosur, Tamil Nadu. It has an existing plant in Malur near Kolar in Karnataka. 

In India, iPhone 12, 13, 14, and 15 models are being manufactured. In 2023-24, around $14 billion worth of iPhones were produced in India, which was 14 percent of its global production. One in seven iPhones manufactured in the world was manufactured in India. 

Electronic Export From India in 2023-24 

Accroding to the Union Ministry of Commerce, the total export of electronics goods from India during 2023-24 (FY24) was $29.12 billion. Compared to last year, the growth rate in the export of electronics goods was 23.6%. 

However, in 2023-24, India's overall merchandise goods export showed a negative growth rate of around 3%. In 2022-23, the overall merchandise export was $451.07 billion, while in 2023-24, it was $437.06.

Top five export destinations 2023-24 

The main buyers of Indian electronic goods, in descending order, were the United States, the United Arab Emirates, the Netherlands, the United Kingdom, and Italy.

For the first time, India exported electronic goods to Montenegro, the Cayman Islands, El Salvador, Turkmenistan, Mongolia, Honduras, and St Vincent.

Production Linked Incentive Scheme (PLI)

The government of India approved the Production Linked Incentive (PLI) Scheme in March 2020 as part of its Atmanirbhar Bharat campaign to boost the manufacturing sector in India. The PLI policy was notified on 1 April 2020.

Aim of the PLI scheme

The PLI Schemes aim to 

• attract investments in key sectors and cutting-edge technology; 
• and bring economies of size and scale in the manufacturing sector and ensure efficiency 
• make Indian companies and manufacturers globally competitive.
• Creation of 60 lakh new jobs and an additional production of Rs30 lakh crore during the next 5 years

Sectors under PLI

At present, there are 14 sectors under the PLI scheme. Initially, the government notified three sectors under PLI in March 2020. Later, 10 more were added in November 2020, and the 14th sector, Drones and Drones Component was added in September 2021 

The first three sectors under the PLI were

(1) Mobile Manufacturing and Specified Electronic Components, 

(2) Manufacturing of Medical Devices 

(3) Critical Key Starting Materials/Drug Intermediaries & Active Pharmaceutical Ingredients, 

Other sectors are 

(4) Automobiles and Auto Components, 

(5) Pharmaceuticals Drugs, 

(6) Specialty Steel,

(7i) Telecom & Networking Products, 

(8) Electronic/Technology Products,

(9) White Goods (ACs and LEDs),

(10) Food Products,

(11) Textile Products: MMF segment and technical textiles, 

(12) High-efficiency solar PV modules,

(13) Advanced Chemistry Cell (ACC) Battery, and 

(14) Drones and Drone Components.

Total Outlay of the Scheme 

• The government of India has committed to spend Rs 1.97 lakh crore (over US$26 billion) over a period of 5 years starting from 2021-22 for the 13 sectors.
• The outlay for the drone and Drone components is Rs 120 crore.

Incentive under the PLI Scheme 

• In the PLI scheme, the eligible companies are divided into domestic Indian companies and foreign companies.
• These companies are given incentives for manufacturing products in India and on its incremental sales. 
• The incentive varies from products to products but they are generally in the range of 4 to 6% of the sales.