Electronics exports may soon surpass petroleum products in India
What's the story
India's electronics exports are on a rapid growth trajectory, with the potential to overtake petroleum products as the second-most exported category after engineering products. The shift comes as the US discourages Indian refiners from buying Russian crude oil. Data from the commerce ministry shows that electronics exports were India's third-largest and fastest-growing overseas sales category in FY26's first half.
Market shift
Electronics sector's remarkable rise
The electronics sector has jumped from seventh place in FY22 to third place in FY25, surpassing gems and jewelry as well as chemicals. It had already surpassed drugs and pharmaceuticals, as well as readymade garments, before reaching third place in FY25. The sector's growth is largely driven by Apple's iPhones, which account for nearly half of India's electronics exports.
Export trends
Electronics exports could double by FY26
In the last fiscal year, electronics exports surged 42% to $22.2 billion, while petroleum products fell 16.4% to $30.6 billion. Engineering products led the pack with $59.3 billion in exports, up 5.35% from the previous year. Over the past three years, electronics exports have jumped by a whopping 63%, from $23.5 billion in FY23 to $38.5 billion in FY25. At this rate, they could double by FY26.
Sanction effects
US sanctions on Russian oil imports
US sanctions have affected low-priced Russian crude oil imports, removing the cost advantage for Indian refiners. Experts believe this could lead to a faster decline in petroleum exports. The gap between petroleum and electronics exports has also narrowed since the launch of the production-linked incentive (PLI) scheme, indicating a potential shift in India's export landscape.
Growth catalyst
Smartphone PLI scheme boosts production, exports
The smartphone PLI scheme has been a major contributor to the surge in electronics exports. Companies like Apple, Samsung, and local contract manufacturer Dixon Technologies are leveraging these incentives to ramp up production and exports.Apple has even made India its second base after China for iPhone manufacturing, with over a fifth of iPhones now being shipped from India.