Exports falter in 2023, but outlook for 2024 sanguine

TRADE SHIFTS TO TECH ITEMS, SMARTPHONE SHIPMENTS UP 93%

- MUKESH JAGOTA

THE HEADLINES OF 2023 captured declining merchandise exports and record trade deficits, but beyond it, India moved ahead in the global markets for goods and services in the year.

The world's imports in the year are seen at $25 trillion, of which 70% or $17 trillion market is for product segments where India has so far not made any strides.

In 2022, India's share of such market stood at 0.26%, and this is gauged to have improved in 2023, though exact figures are still to be computed.

This market for high value and high technology items is what is drawing the attention of policymakers now. It all started with the Production Linked Incentive (PLI) scheme for large scale electronics manufacturing and gradually expanded to cover 14 sectors with an outlay of ₹1.97 trillion. The process to address that market, which started in 2021, showed early signs of success in 2022 and gathered pace in 2023.

The first high-technology product to enter the export market in a significant way is smartphones. As the likes of Apple and Samsung set up local manufacturing bases, in 2022 exports of this product from India were $7.2 billion from virtually nil in 2021.

In 2023, this segment saw a jump of 93% on year to $13.9 billion which is already more than the exports of the traditional sector of ready made garments. It now accounts for 3.23% of total exports of $429.4 billion. This significant increase contributed to the overall rise in India's electronics exports, which reached $26.8 billion, marking a growth of 26.2% and a share in total exports of 6.2%.

Of course, these exports have a large import content, and the domestic value addition needs to improve, yet the headway made in a short span of time is impressive.