Mobile phones were the biggest driver of telecom product exports, having risen 160% until August this fiscal to $1.4 billion, thanks to a production-linked incentive scheme announced last year.

Buoyed by a spurt in the outbound shipment of telecom instruments, led by cell phones, electronics exports will likely hit a record $15 billion in the current fiscal, official sources told FE.

However, with the impact of the pandemic abating and global supply chains gradually returning to normalcy, electronics imports, too, may hit an all-time high of $60 billion in FY22, according to a senior industry executive. This will push up electronics trade deficit to about $45 billion this fiscal from $42 billion in FY20. In the first half of the current fiscal, electronics imports climbed 39% to $31 billion. Exports of electronics, which had emerged as the fastest-growing segment before the pandemic struck, dropped to $10.6 billion in FY21 from $11.2 billion in FY20, according to the DGCIS data.

However, in the first half of the current fiscal, such exports surged 59% to $6.2 billion. Overseas despatches are expected to spike in the build-up to the Christmas season.

Mobile phones were the biggest driver of telecom product exports, having risen 160% until August this fiscal to $1.4 billion, thanks to a production-linked incentive scheme announced last year. The UAE remained the biggest destination, making up for about 40% of cell phone exports.

Importantly, while overall merchandise imports plunged 17% in FY21, purchases of electronics from overseas actually rose from a year before, albeit marginally, to $52.6 billion, as many people were forced to work from home in the wake of the pandemic. Since domestic value addition in the overall electronics space still remains far from satisfactory in several segments, huge volumes of components are imported every year, according to senior industry executives.

Elevated electronics trade deficit may pressure the country’s current account in the coming months, especially when global oil prices threaten to hit multi-year highs and imports are staging a rebound. “The current account deficit will still remain well under control,” insisted one of the official sources. The country witnessed an unusual 0.9% current account surplus in FY21, as imports collapsed in the aftermath of the pandemic.