Electronics imports up by 26% due to influx of Chinese products

Aamir H Kaki

The influx of cheap electronics products from China has led to an increase in imports of these products in India in the month of January. As per estimates of Ministry of Commerce, imports of electronics increased by 26% to Rs.26,757.59 crore in January, compared to Rs.21,220 crore in the same month last year.

However, the exports of electronics fell by 10% to Rs.3,162.73 crore against the Rs.3,526.13 in the corresponding period a year ago, the data revealed.

Commenting on the figures, Vishwas Agarwal, Head - International Business, Intex Technologies told The Dollar Business Bureau, “The reason for this data surely is the advent of the new Chinese companies that have come to India. Now many of the Chinese companies have come in the last one year and they are pumping in a lot of money and investment.”

He further said, “Because of the Chinese companies coming into India, 50% of the market share has gone to the Chinese products that has led to a negative impact as homegrown companies have lost a share in the market. They are putting in a lot of money into our country as worldwide reports predict that India is going to be the world’s biggest market for mobile phones.”

Right now China is the biggest market, but India will cross China very soon. Referring to the size of the Indian market he said, “Everyone knows that ultimately whether they go to 10 countries or to India, it is the same thing.”

India’s trade numbers have been growing but a lot needs to be done in many spheres for the country to actually increase its numbers and stand out like China. Replying to a question on how India could improve its export numbers he said, “To encourage any kind of exports, you need to create that kind of mechanism which encourages exports. As an exporter, I am doing what others do, but I don’t feel the differential advantage. I am actually losing out by shipping from here. Until and unless, there is a clear cut advantage given to the exporters, the situation will not improve.”

Earlier, the Indian Cellular Association (ICA) had said that production of mobile phones in India is on track to meet the desired numbers but value addition in locally made mobile phones needs to be encouraged and the government has to put in extra measures to enhance exports.

“We are on track to meet mobile phone production in the country as committed. In 2016-17, the total value of mobile phones to be produced is likely to reach Rs.90,000 crore from Rs.54,000 crore in 2015-16. However, to curb imports, thegovernment needs to stick to its commitment of phased manufacturing programmes which will lead to increase in local value addition,” Pankaj Mohindroo, National President, ICA, said.

The recently announced Union Budget 2017-18 had skipped extending differential duty on receivers, mic, plastics and metals, keypads, USB cables as demanded by mobile phone manufacturers which was proposed under phase manufacturing programme-2.

Fast Track Task Force created under the Ministry of Electronics and IT has set up a target production of 500 million handsets, export 120 million mobile phones by 2019-20. The ministry aims to increase the annual manufacturing output byRs.1.5-3 lakh crore.