India’s electronics imports from China surged to $8.8 billion in Q1 2024, marking a 27% year-on-year increase, even as New Delhi intensifies scrutiny on inbound shipments. The latest customs data reveals a puzzling trend—growing dependence on Chinese components despite the government’s aggressive self-reliance push.
Key Findings from the Trade Data
📌 Top Import Categories (From China):
- Integrated Circuits (ICs) & Semiconductors – $3.2B (Up 34%)
- Mobile Phone Components – $1.9B (Up 22%)
- Laptop & Tablet Parts – $1.5B (Up 18%)
📌 Contradictory Trend:
- Overall electronics imports fell 11% (from non-China sources)
- But China’s share rose to 62% (from 54% last year)
Why Is India Still Addicted to Chinese Electronics?
1️⃣ PLI Scheme Gaps – Local manufacturing still relies on Chinese inputs
2️⃣ Price Advantage – Chinese components 30-50% cheaper than alternatives
3️⃣ Supply Chain Dependence – Hard to replace China in semiconductors & displays
4️⃣ Gray Market Imports – Suspected under-invoicing to bypass restrictions
“We’re assembling more in India, but the value addition is still low,” admits a senior MeitY official.
Government’s Countermeasures (And Why They’re Not Working Yet)
🔹 Customs VIGILANCE – Increased checks at major ports
🔹 BIS Certification – Mandatory for 32 new electronic items
🔹 Anti-Dumping Probes – On PCBs, camera modules, and LEDs
Yet, loopholes persist:
- Third-country rerouting (via Vietnam, Malaysia)
- Misclassification (importing parts as “mechanical items”)
- E-commerce loopholes (small parcels evading duties)
Industry Reactions: Frustration & Adaptation
✅ Indian Manufacturers:
“We want to reduce China reliance, but local suppliers lack scale.” – Foxconn India VP
❌ Chinese Suppliers:
“Indian buyers keep coming back—no one matches our prices.” – Shenzhen-based exporter
💡 Startup Workaround:
Some firms are stockpiling components before stricter rules kick in.
The Bigger Picture: Trade Deficit Concerns
🇮🇳🇨🇳 India-China Trade (Q1 2024):
- Total Trade: $28.5B
- Deficit: $19.1B (67% of total)
- Electronics = 31% of deficit
“Unless we build local semiconductor fabs, this won’t change,” warns CII’s trade head.
What’s Next?
🔮 2024-25 Outlook:
- Stricter import norms (new QC rules from July)
- PLI 2.0 – More incentives for local component makers
- Vietnam Diversification – Firms exploring alternative suppliers
