That may be the typical interpretation for many economic buffs. India has sunk in billions of dollars into the “Make in India” program, but not much seems to come out of it. The “Make in India” was not only intended as an export promotion bit, but also as an import substitution bit, that would help curb imports. However, that does not seem to be happening. In month after month, the merchandise trade deficit continues to average well and truly above $23 billion. The problem lies in the way India is executing its very hallowed “Make in India” program! 

It is good to see that India is getting a much bigger share of electronic exports in the trade basket. This is led by likes of Apple that is putting its faith on India over China to drive its global output. But, for India, the outsourcing for companies like Apple comes at a very steep price. If you look at a mobile phone piece that is made in India for Apple, the domestic content is around 15-20%. It is up from 8% in 2020, but still too slow. Without a domestic electronics support engine, the projects like making Apple phones, only result in the import bill spiking in India. 

In the previous financial year, Apple made iPhones worth $22 billion in India. While countries like China and Taiwan are able to feed most of the inputs with domestic production of electronic parts, in the case of India, most of these parts have to be imported. So, as the export engine grows, the import engine also grows along with it. For April 2025, the electronic exports stood at $3.69 billion, compared to $2.65 billion in April 2024. If you look at electronics goods imports, it stood at $9.25 billion in April 2025, compared to $7.05 billion in April 2024. The current policy of acting more as an assembler of electronic products, not only means a higher import bill, but it will continue to grow in tandem with growth in exports. Also, imports are front-ended. That is the challenge for Make in India. 

Obviously, the logic is to put the horse before the cart. Ideally, such a massive program like Make in India has to also be accompanied by a program to boost the domestic manufacture of parts. That is what India successfully did in the auto space by developing a domestic ancillary industry. Countries like Taiwan and China have done that in electronics. India has to fast-track that plan and then expand the template. Mobile phones were the low-hanging fruit, but for that to grow in a big way, India does need local supplies. Else, trade deficit will be the casualty!