Smartphones beat Diamonds in Exports to the US

Smartphones, led by global technology major Apple Inc’s iPhones, have quietly surged to become India’s largest product export — based on HS (harmonised system) code classification — to the US by value over the past three quarters, overtaking non-industrial diamonds.

According to the latest data from the Department of Commerce, in the June quarter of 2024-25, smartphone exports hit $2 billion, well ahead of non-industrial diamond exports, which stood at $1.44 billion.

This shift first occurred in the December quarter of FY24 when smartphone exports to the US reached $1.42 billion, surpassing diamond exports at $1.3 billion. By the final quarter of FY24, the gap widened as smartphone exports in value terms soared by 43 per cent quarter-on-quarter to $2.02 billion, while diamond exports dropped 4.6 per cent to $1.24 billion.

The surge in smartphone exports can be attributed to India's expanding electronics manufacturing capabilities, supported by government initiatives such as the Production Linked Incentive (PLI) scheme. On the other hand, the decline in diamond exports can be linked to several factors, including shifts in consumer spending habits, evolving fashion trends, and economic fluctuations that have impacted the luxury goods market. Additionally, the rise of lab-grown diamonds, which are more affordable, has influenced the traditional diamond trade.

This shift underscores India's increasing significance in the global electronics supply chain, as the country moves from primarily exporting raw materials and luxury goods to becoming a key player in the technology sector. With the U.S. as a major market for smartphones, this trend is likely to persist, solidifying India’s standing in the global technology and electronics industry.