India's electronics exports rose 44% year on year to $31.9 billion in April-September, helped by an increase in smartphone shipments, official data showed. The strong export growth came even as the sector's import bill kept climbing on the back of pricier chip inflows.
Electronics imports widened 22% to $68.53 billion in the same six months. As a result, the absolute trade deficit in electronics stretched to $36.57 billion, up from $33.9 billion a year ago.
Smartphones lead the export growth
Smartphones were the main driver of the export surge. India has built up large-scale phone assembly in recent years, and the country is now the world's second-largest mobile phone producer, helped by the production-linked incentive scheme for electronics manufacturing.
Exports accelerated faster than the widening import bill in percentage terms in the first half of the financial year, but the gap between what the sector sells abroad and what it buys remained wide in absolute terms.
Pricier chips push up imports
Surging chip prices affected trade in both directions. Costlier chip inflows were the main reason the import bill rose 22% to $68.53 billion in April-September.
The reliance on imported components remains the weak point of the export story. Industry estimates put domestic value addition in smartphones made in India at around 18 to 20%, which means most of a phone's value still comes from parts bought abroad, largely from China.
Government watching supply chains
The government is monitoring supply-chain vulnerabilities across critical product lines, officials said, as surging chip prices continue to affect both inbound and outbound trade.
The electronics figures sit within a wider trade picture. Broader trade data for the same April-September period show India's overall merchandise exports rose 18.51% to $259.89 billion, while imports grew 16.31% to $437.53 billion, widening the cumulative merchandise trade deficit to $177.64 billion.
What the numbers mean
The figures underline a familiar pattern. Exports are growing fast, but the sector still depends on imported chips and components, which is why the government is watching supply-chain risks. The longer test is whether more of that value can be added at home, rather than imported as components.
