India's Electronics Exports Surge: iPhone Boom Propels Growth, Set to Overtake Petroleum Products
India's electronics sector is experiencing unprecedented growth, rapidly climbing the export rankings and positioning itself to become the nation's second-largest export category. Driven primarily by the smartphone revolution, particularly Apple's iPhone manufacturing expansion, electronics exports are reshaping India's trade landscape in remarkable ways.
Electronics Exports Reach Record Heights
According to recent commerce ministry data, electronics exports have witnessed explosive growth during the first half of fiscal year 2026 (FY26). The sector registered a stunning 42% surge to $22.2 billion, up from $15.6 billion in the corresponding period last year. Remarkably, Apple's iPhone shipments account for approximately half of this total.
This remarkable ascent marks a dramatic transformation in India's export portfolio. Electronics has jumped from the seventh position in FY22 to become the country's third-largest and fastest-growing export category in just four years.
Rapid Rise Through the Rankings
The electronics sector's journey to prominence has been nothing short of extraordinary. In its climb to the top three, electronics has overtaken several established export categories:
- Surpassed drugs and pharmaceuticals and readymade garments on the way from seventh to fourth position
- Displaced gems and jewellery from third place in FY25
- Outpaced chemicals which previously held fourth position
Over the past three years, electronics exports have experienced remarkable growth of 63%, rising from $23.5 billion in FY23 to $38.5 billion in FY25. Industry analysts project that at the current trajectory, electronics exports will double from FY23 levels by the end of FY26.
Petroleum Products Face Decline
While electronics soar, petroleum products—currently India's second-largest export category—are experiencing a significant downturn. In the first half of FY26, petroleum exports declined 16.4% to $30.6 billion from $36.6 billion in the previous year.
The petroleum sector has been on a downward trajectory, falling from $97.4 billion in FY23 to $63.3 billion in FY25. This decline is expected to accelerate following US sanctions on Russian crude oil, which previously provided Indian refiners with a crucial cost advantage.
Narrowing the Gap
The gap between petroleum products and electronics exports is closing rapidly. At the inception of India's production-linked incentive (PLI) scheme, the difference stood at $73.9 billion. By FY25, this gap had narrowed dramatically to $24.7 billion, and experts predict it will shrink further to approximately $16 billion in FY26.
If current growth rates continue, electronics could potentially overtake petroleum products to become India's second-largest export category by FY28, trailing only engineering products which currently lead at $59.3 billion.
Apple and the iPhone Revolution
Apple's iPhone manufacturing operations in India have emerged as the primary catalyst for electronics export growth. The tech giant has established India as its second global manufacturing hub after China, with locally produced iPhones now representing over one-fifth of global iPhone sales.
The numbers are staggering. During the first six months of FY26, Apple shipped iPhones worth a record $10 billion from India. These shipments represent:
- More than 75% of $13.4 billion in total smartphone exports
- An impressive 45% of $22.2 billion in overall electronics exports
PLI Scheme Drives Manufacturing Success
The smartphone production-linked incentive scheme has proven instrumental in driving this export boom. Major manufacturers including Apple, Samsung, and domestic contract manufacturer Dixon Technologies have leveraged these financial incentives to significantly expand production capacity and export volumes.
The PLI initiative aligns with India's broader strategy to capitalize on the global geopolitical shift that's encouraging multinational corporations to diversify their supply chains away from over-reliance on single countries.
Following China's Footsteps
Electronics has been China's largest export category for many years, and India is now positioning itself to replicate this success. The ongoing geopolitical realignment and supply chain diversification efforts by global companies present a significant opportunity for India to strengthen its electronics manufacturing capabilities.
Industry experts believe this trend represents a fundamental shift in India's trade composition, moving from traditional exports toward high-value technology products. The electronics sector's rapid ascent demonstrates India's growing competitiveness in global manufacturing and its ability to attract major international technology companies.
Future Outlook
The outlook for India's electronics exports remains exceptionally positive. With continued policy support, manufacturing incentives, and India's growing reputation as a reliable alternative manufacturing destination, the sector is poised for sustained expansion in the coming years.
While petroleum products will likely maintain third position in FY26, the long-term trajectory clearly favors electronics as India's export powerhouse. Much will depend on how global trade dynamics evolve, particularly regarding oil trade and technology supply chain configurations, but the current momentum suggests electronics will play an increasingly dominant role in India's export portfolio.
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