In electronics exports, Tamil Nadu jumps to top on Apple's India push

Driven by the aggressive India push from global major Apple, the southern state of Tamil Nadu has become the top state in terms of electronic goods exports in the financial year 2023-24, surpassing Karnataka and Uttar Pradesh. The state posted a 78 per cent increase in exports from $5.37 billion in 2022-23 to $9.56 billion in 2023-24.

This accounts for around 33 per cent of the total exports of the country, surpassing a $9 billion target set by the state a few months ago. One major reason for this is the ‘China Plus One’ strategy adopted by global majors like Apple. As a result, its contractors such as Foxconn and Pegatron, along with suppliers like Tata Electronics and Salcomp, have contributed to the rise of Tamil Nadu as the country’s electronic hub last year.

 

"Tamil Nadu has achieved a record-breaking $9.56 billion in electronics exports in FY 2023-24. With the electronics sector just beginning to flex its capabilities, we're racing towards another all-time high next year, and many years to come," said TRB Rajaa, Tamil Nadu Industries Minister. With the Foxconn mobile components plans, Salcomp expansion, Flex expansion, Tata Electronics, and Pegatron expansion, this figure may further increase next year.

In 2023-24, Karnataka became the number two exporting state with $4.62 billion, contributing to 16 per cent of the national exports, followed by Uttar Pradesh with $4.46 billion worth of exports and 15 per cent of the national share. The other top states in the list are Maharashtra ($3.09 billion), Gujarat ($2.75 billion), Delhi ($1.51 billion), Haryana ($698.3 million), and Telangana ($610.62 million).

"Tamil Nadu is setting the pace, proving that our strategies and investments create a fertile ground for high-quality job opportunities and robust economic growth. This is just the beginning, and the best is yet to come," he added. Rajaa further expressed hope that the new Union government will enable the state to play to the strengths of each state instead of relocating key projects in the electronics value chain to states which lack a supporting ecosystem.

In 2022, J.P. Morgan stated that Apple, aiming to diversify production, is considering manufacturing 25 per cent of its handsets in India by 2025 and shifting 5 per cent of global production of the iPhone 14 to India by the end of 2022.

Following this, Foxconn, the world's largest electronics maker and best known for manufacturing Apple’s iPhones, announced it will invest $500 million in its India unit to expand production. There were also reports that it may increase staff strength from around 15,000 to 18,000. In September 2022, Taiwan’s Pegatron became the third Apple vendor (after Foxconn and Wistron) to set up a manufacturing unit in India by inaugurating a facility at Mahindra World City in Chennai and investing around Rs 1,100 crore in the unit, potentially creating around 14,000 jobs. In March 2023, Salcomp, the world’s largest producer of mobile phone chargers and a key supplier to Apple Inc., also announced plans to invest around Rs 1,800 crore in its Tamil Nadu unit.