According to a report by the economic think tank GTRI, India’s imports of electronic goods from China have declined in the fiscal year 2022-23. The import of laptops, PCs, mobile phones, medical equipment, and solar cells saw significant drops. The decline in imports is particularly noteworthy in the electronic items sector where the production linked incentive (PLI) scheme is in operation.
Imports of laptops and PCs fell by 23.1% to $4.1 billion, while mobile phone imports decreased by 4.1% to $857 million compared to the previous financial year. Integrated circuits also experienced a decline of 4.5% with imports amounting to $4.7 billion. Additionally, the import of medical equipment dropped by 13.6% to $2.2 billion, and solar cells, parts, and diodes slumped by 70.9% to $1.9 billion. Similarly, the import of urea and other fertilizers decreased by 26% to $2.3 billion.
However, there was a significant increase in the import of lithium-ion batteries, which surged by approximately 96% to $2.2 billion. This increase is attributed to the growing adoption of electric vehicles in the country.
The report highlighted three key data points indicating a decline in India’s imports from China. Firstly, India’s electronics imports from China decreased from $30.3 billion in FY22 to $27.6 billion in FY23. Secondly, India’s total goods imports from China grew at a lower rate of 4.2% during FY23, compared to the global imports growth rate of 16.1%. Lastly, China’s share in India’s merchandise imports decreased from 16.4% in FY18 to 13.8% in FY23, representing a decline of 15.7%.
Despite the decline, China remains India’s top import supplier, and the report acknowledges India’s critical dependence on China for various products. It also stated that China’s share in India’s merchandise imports decreased from 16.4% in 2017-18 to 13.8% in 2022-23.
The report emphasized that China is India’s fourth largest export destination, following the United States, the United Arab Emirates, and the Netherlands. However, Indian exports to China declined by 36% to $13.6 billion in 2022-23.
GTRI co-founder Ajay Srivastava noted that India’s fate in electronics and computer hardware production was determined when India signed the Information Technology Agreement (ITA) in 1997, which made import duties on such products illegal. Srivastava stated that the PLI scheme is attempting to address the situation to some extent, and positive results are visible in the decrease in electronic product imports from China. He suggested that India should invest in deep manufacturing to further accelerate progress, including producing lithium-ion cells for electric vehicle batteries, PCBs for laptops, and components for mobile phones rather than merely the outer shells of the final products.
In conclusion, the report highlights the decline in India’s imports of electronic goods and other products from China in the fiscal year 2022-23. While there has been a decrease in imports, China remains India’s top import supplier, and the country is still heavily reliant on China for various products. The report emphasizes the need for India to focus on domestic manufacturing and invest in key areas to reduce dependence on imports and promote self-reliance.