Key Points
In this regard, a recent post by Raghuram Rajan on the impact of the scheme in mobile phones is illustrative..
Rajans analysis focused on two variables: the ostensible impact of PLI on net exports of mobile phones and the amount of value-added being captured in India..
One, net imports of mobile phones (and their sub-components) from the time PLI came into effect have seen a massive increase at a headline level (up nearly $8 billion from 2017 to 2023)..
Even at the most aggressive scenario drawnwith 80% of all such components attributed to mobile phonesIndias net mobile imports show a flat trend..
Given that Indias own smartphone consumption has grown 70-80% from 2017 to 2023 (20-25% in volumes, 50-55% in value), a flat net import trajectory in the period would represent a great validation of PLI, especially since these are still early days..
