India’s Electronics Exports to China Surge at $2.5 billion

• Apple suppliers exported a record $2.5 billion in components to China in FY26, signaling ECMS success.

• Electronics exports to China may hit $3.5 billion this fiscal, up sharply from $920 million in FY25.

• Trade flows are reversing, with India now supplying parts to China.

• PLI and ECMS boosted domestic manufacturing and quality competitiveness.

• India could capture 30–35% of global mobile production.

  
  

India’s electronics sector is witnessing a dramatic shift, with Apple’s suppliers exporting an unprecedented $2.5 billion worth of components and sub-assemblies to China so far in FY26. Government officials and industry leaders say the milestone signals early momentum for the Electronics Component Manufacturing Scheme (ECMS), introduced last year to strengthen domestic capabilities.

The development also reflects a striking reversal of longstanding trade flows. For years, Chinese suppliers shipped key components to India to support mobile phone assembly and electronics production. Now, Indian factories are dispatching critical parts to China, marking a notable change in the direction of trade within the global electronics ecosystem.

Industry executives estimate that India’s electronics exports to China could reach $3.5 billion in FY26, with $2.8 billion already recorded by January. By comparison, such exports stood at approximately $920 million in FY25 and were negligible in prior years. As data from other industries is compiled, India’s overall exports to China are projected to exceed $18 billion this fiscal year, up from $14.25 billion in FY25. According to a person familiar with the numbers, the entire increase stems from Apple-linked shipments.

Apple did not respond to requests for comment.

Observers describe the sharp rise in electronics exports as an unforeseen benefit of the smartphone Production Linked Incentive (PLI) scheme and the newer ECMS framework. These initiatives encouraged Apple to deepen its manufacturing footprint in India and cultivate a local supplier base capable of meeting global quality standards. That ecosystem, executives say, has matured enough to support exports of sophisticated components back to China.

When Apple began relocating part of its iPhone production from China to India in 2021, few anticipated such a scenario. Yet under the five-year smartphone PLI program, Apple manufactured iPhones worth roughly $70 billion in India. Of that total, around $51 billion — nearly 73% — was shipped overseas, primarily to the United States. As a result, iPhones emerged as India’s largest export category in the previous fiscal year.

A range of Apple’s India-based vendors have contributed to the latest export push to China. These include Foxconn, Tata Electronics, Tata-owned Pegatron, Motherson, Salcomp, TRIL Bangalore, and Yuzhan Technology. The shipments consist of printed circuit board assemblies (PCBAs), mechanical components, casings, flexible PCBAs, and conductive graphite buttons used for power and volume controls. Industry sources note that these items fall under three harmonised customs codes and that outbound shipments have accelerated since April 2025.

While the smartphone PLI program is widely regarded as a success — largely because of Apple’s expanding iPhone production — policymakers now aim to replicate that progress in the components segment through ECMS. With the original smartphone PLI scheme concluding in March, industry representatives have proposed a second phase, or PLI 2.0, to sustain investment and production growth.

Officials and executives argue that a combination of PLI 2.0 and ECMS could enable Indian firms to account for 30–35% of global mobile phone output, cementing the country’s position in international electronics supply chains. In a further twist, China — long India’s dominant source of electronics imports — may increasingly serve as a destination for Indian-made components.

Given that China’s cumulative electronics imports surpassed $600 billion during calendar year 2025, industry watchers believe India has significant headroom to expand its presence in that market. If current trends continue, the shift could redefine trade dynamics between the two Asian manufacturing giants.