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During the first half of the current fiscal year, Apple's iPhone exports reached an unprecedented $10 billion. (AI image)
The booming Apple iPhone production in India, and the latest sanctions on Russian oil firms by Donald Trump, may power electronics to become the second most-shipped exports category in India.
It’s a story of rise in electronics exports and a likely fall in India’s oil exports as US sanctions may hit the flow of discounted Russian crude.According to an ET report, electronics exports are projected to surpass petroleum products as India's second-highest export category, following US sanctions that could hit Indian refiners' Russian crude purchases.
India’s Exports Basket: The Rise of iPhones
- The commerce ministry's half-yearly export data reveals that electronics exports grew by 42% hitting $22.2 billion, with Apple's iPhones contributing approximately half of this value, compared to $15.6 billion in the previous year.
- Commerce ministry data shows that electronics exports have firmly established themselves as the nation's third-largest and most rapidly expanding overseas sales segment during the first half of FY26. Experts told ET that with limitations on Russian oil procurement, electronics could rise to the second position behind engineering products within two years.
- The electronics sector was at the seventh position in export rankings during FY22.
- For the year concluding in March, electronics emerged as the fastest-growing category amongst the top 10. Subsequently, its growth has intensified, achieving the highest growth rate across all 30 export categories in the first six months of FY26.
- Electronics advanced to the third position, surpassing gems and jewellery and chemicals in FY25. Previously, it had moved from seventh position in FY22, overtaking drugs and pharmaceuticals and readymade garments sectors.
- On the other hand, petroleum products saw a decline of 16.4%, dropping to $30.6 billion from $36.6 billion. Despite remaining India's second-largest export category, petroleum has shown a consistent decline from $97.4 billion in FY23 to $63.3 billion in FY25.
- Engineering maintained its leadership with $59.3 billion, showing a 5.35% increase from $56.3 billion in the previous year.
- The electronics sector has seen substantial growth over three years, with exports increasing by 63% from $23.5 billion in FY23 to $38.5 billion in FY25.
"At the current rate, electronics exports will double from FY23 to FY26," an analyst was quoted as saying.
Electronics Exports - Rising through the ranks
The Decline of Oil Exports
Export analysts indicate that oil shipments could experience a steeper downturn following US sanctions on discounted Russian crude, eliminating the price benefit for Indian refiners. "The exports were going down despite the cost advantage due to Russian oil for the past few years. When this advantage is no longer available, the exports may suffer more," noted a sector specialist.The differential between petroleum, ranked second, and electronics during the first six months reduced from $73.9 billion when the production-linked incentive (PLI) scheme commenced to $24.7 billion in FY25.
This gap is projected to further contract to $16 billion in FY26, according to industry observers.Whilst petroleum products will maintain the third position in FY26, electronics could potentially overtake petroleum as India's second-highest export category by FY28, based on current growth trajectories. However, this progression largely hinges on the evolution of India's oil trade in relation to the US administration's position regarding Russian oil.Electronics exports have dominated China's trade portfolio for many years. Given the current global geopolitical shifts that are encouraging multinational companies to diversify their manufacturing bases, India is strategising to establish electronics as its core competency, according to industry specialists.The Production Linked Incentive scheme for smartphones has significantly boosted electronics exports, with major players like Apple, Samsung and domestic manufacturer Dixon Technologies leveraging financial benefits to enhance production and overseas sales.
India has emerged as Apple's secondary manufacturing hub after China for iPhone production. Notably, Indian-manufactured iPhones now constitute more than 20% of global iPhone shipments.During the first half of the current fiscal year, Apple's iPhone exports reached an unprecedented $10 billion. These shipments represented over 75% of the total smartphone exports valued at $13.4 billion and contributed 45% to the overall electronics exports of $22.2 billion.
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