In charts: The red flags behind the $40 billion electronics exports
India indeed exported electronic goods worth $40.9 billion in 2024-25. However, it is equally important to note that the country also imported $102.6 billion worth of electronic goods, making it a net importer by a huge margin. Over the years, several questions have been raised about India's import dependence in electronics, even as the country has made great strides in the segment.
Electronics exports have indeed been a bright spot in India's export basket. The segment's growth has been around or above 30%, surpassing the growth in the country's overall exports in several years since 2018-19. At the same time, growth in electronics imports has also been robust, averaging around 10% between 2018-19 and 2024-25.
The good news is that India's electronics imports, despite being high, have come down as a share of exports. India's imports used to be 7.4X the exports in 2017-18, which began declining steadily as exports picked up the pace from 2018-19. Currently, imports are 2.5X the exports.
The gap is still huge, and heavy reliance on China for imports makes India particularly vulnerable. In the past decade, Chinese import share in the electronics segment has come down by 10 percentage points, but at around 40%, the dragon's presence as the single biggest source is worrying.
Shifting landscape
The electronic goods segment is unique as its processing is not confined to a particular economy. A report released by NITI Aayog in 2024 highlighted how multiple countries come into play in the production of an iPhone: The core design originates from the US, essential rare earth materials used in the devices are predominantly from China, several other critical parts such as LCD panels, microchips and memories are supplied from Japan, Korea and Taiwan, and end products are assembled in countries like China, Vietnam, and India.
If iPhones were a great example of globalization and collaboration, the US's tariff threats and China's export curbs to maintain its dominance have threatened the collaborative trade order.
The changing landscape underlines the need for more independence in the segment. India has aced the final assembly, sub-assembly, and exports, particularly in the mobile and consumer electronics segments, but the country lags in component manufacturing and design. High input costs due to tariffs, limited access to global markets, high capital costs, inadequate industrial infrastructure, a weak R&D and design ecosystem are some of the challenges that the electronics segment faces, the NITI Aayog report noted.
Need to diversify
Just like imports, India's electronic exports are highly driven by one country: the US. The world's largest country accounted for 37.3% of the total electronics exports, up from about 14% since 2010-11, coinciding with India's expansion in the sector. The following top destinations are the United Arab Emirates (UAE), the Netherlands, and the UK—but their shares were only 4.8-9% in 2024-25 and haven't increased much in the past 15 years.
The recent trade policies adopted by US President Donald Trump have made the US a risky export destination. Currently, there are no tariffs on some consumer electronic goods, but this is not a permanent policy.
Apple is shifting its production to India, but there are two looming risks: Trump's tariff threat to Apple if it produces its products anywhere but the US, and China's attempts to derail any progress in India through curbs on the supply of critical materials. These developments call for not only less import dependence but also more diversified export destinations.
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