Winning Bizness Economic Desk

Apple Inc has exported iPhones valued at over USD 2-billion from India in the first two-months of the current financial year (FY 25).

This, it must be pointed out, is 81 per cent of the country’s total production of iPhones worth USD 2.6-billion.

Apple repeated its performance of April in May too with exports of iPhones once again crossing the USD 1-billion mark.

The commitment under the Production Linked Incentive (PLI) scheme for the three Apple Inc vendors in FY 25 is to hit a production value of USD 10.2-billion (including exports). Significantly, they have achieved this in just two-months of this financial year.

So far in FY 25, Apple’s leading vendor Foxconn Hon Hai has contributed 65 per cent of the total exports, Wistron 24 per cent and the remaining 11 per cent has come from Pegatron.

All the three vendors are participants in the smartphone PLI scheme and have just begun the fourth year of the five-year scheme.

Here, a point to be highlighted is that the global tech Goliath has the world’s largest global value chain (GVC). It closed the last fiscal (FY 24) in India with a total iPhone production of USD 14-billion in free-on-board (FOB) value.

The market value of these iPhones would be around USD 22-billion, depending on the cost of logistics and local taxation.

In FY 24, Apple exported USD 10-billion worth of iPhones which accounted for 70 per cent of the FOB value of the year’s production.

Rapidly-growing iPhone exports pushed up the country’s mobile phone exports to USD 15.5-billion in FY 24. What needs highlighting here is that this constitutes a nearly 40 per cent increase from the USD 11.1-billion mobile phone exports in FY 23.

In the last fiscal, iPhone exports constituted 35 per cent of India’s total electronics exports and 65 per cent of its total mobile phone exports.

Domestic PV Sales Rise by 4 pc in May

Passenger vehicles (PV) wholesales in the country rose four per cent in May of this year to 3,47,492 units as compared to the same month last year, the Society of Indian Automobile Manufacturers (SIAM) said.

Overall passenger vehicle (PV) dispatches from companies to dealers stood at 3,34,537 units in May of last year (2023)..

“Passenger vehicles have only witnessed a moderate growth, primarily owing to a high base effect of the previous year,” industry body Society of Indian Automobile Manufacturers’ President Mr Vinod Aggarwal, said in a statement.

Two-wheeler sales rose ten per cent to 16,20,084 units last month as compared to 14,71,550 units in the year-ago period.

Three-wheeler dispatches moved northward by a healthy 15 per cent to 55,763 units in May as against 48,610 units in May of last year.

Last month as well, the overall passenger vehicle dispatches from companies clocked a modest 1.3 per cent Year-on-Year (YoY) increase, reaching a record level of 3,35,629 units.

What needs to be highlighted here is the fact that utility vehicle sales surged 21 per cent to 1,79,329 units as compared to the corresponding period of the last year. However, passenger car dispatches witnessed a slide of 23 per cent.

Industry body SIAM reported a sharp northward movement of 31 per cent in two-wheeler wholesales totalling 17,51,393 units in April as compared to the previous year’s number of 13,38,588 units.

SIAM President Mr Aggarwal expressed optimism about the auto industry’s performance in the current fiscal year, noting a positive start in April 2024 as compared to the same period last year.

Retail Inflation Slides to 4.75 Per Cent in May

The country’s headline retail inflation eased to its lowest in a year at 4.75 per cent in May of this year, according to data from the Ministry of Statistics and Programme Implementation (MoSPI).

The Consumer Price Index (CPI) inflation in April of this year was 4.83 per cent while the headline for the last month is the lowest after May 2023 when it came in at 4.31 per cent.

Core inflation is now at an all-time low of 2.97 per cent while the Consumer Food Price Index (CFPI) has remained almost flat at 8.69 per cent as against 8.7 per cent a month ago.

Here, a point to note is that the Reserve Bank of India (RBI), in its latest policy review, has maintained its FY 25 inflation projection at 4.5 per cent but added that food prices could continue to be sticky.

The downward trajectory for the headline inflation rate was partly again on account of a contraction in the fuel and light category of 3.83 per cent in May, albeit at a slower pace than a month ago.

However, food and beverages inflation remained the same at 7.87 per cent last month as against the previous month of April.

Among food, while prices of vegetables eased marginally to 27.33 per cent in May as against 27.80 per cent a month ago, pulses saw a slight rise to 17.14 per cent from 16.84 per cent.

The cost of cereals was also up on a Month-on-Month (MoM) basis. Meat and fish prices clocked a sharp decline of 7.28 per cent in May from the higher 8.17 per cent in April.

It must also be pointed out that sequentially, prices of spices in May softened to 4.27 per cent as against 7.75 per cent a month ago.

India’s IIP Growth Declines To 3-Month Low of 5 Per Cent in April

The country’s factory output growth, as measured by the Index of Industrial Production (IIIP) dipped to a three-month low of five per cent in April of this year as against 5.4 per cent in March.

According to data released by the National Statistical Office (NSO), this is primarily due to a slide in manufacturing. Manufacturing output’s growth during April eased to 3.9 per cent from 5.8 per cent in March.

Mining growth rose to 6.7 per cent from 1.3 per cent while electricity output’s growth also moved northward to 10.2 per cent in April from 8.6 per cent in the previous month of March.

At the use-based classification level, the highest growth was registered by the consumer durables segment at 9.8 per cent, due to a favourable base effect. However, consumer non-durable goods registered a contraction of 2.4 per cent in April.

“This divergence in the two components of consumer demand is reflective of the on-going consumer pattern, which is skewed in favour of households belonging to the upper 50 per cent of the income bracket,” India Ratings and Research (Ind-Ra) said in a note.

The capital goods output growth declined to 3.1 per cent in April from 6.6 per cent in March—this indicates muted investment activity in the economy.

Infrastructure goods output clocked a robust growth of eight per cent as against the 7.4 per cent in the previous month.

Economists say a sustained capex push will continue to lend support to both the capital and infrastructure goods segments even in FY 25. The capex of the union and 19 state governments expanded 14.8 per cent on year to Rs 1.07-trillion in April.

For May, the hi-frequency indicators such as steel production and petroleum consumption suggest that barring primary goods, the industrial activity will be muted.

Ind-Ra, therefore, expects the IIP growth to remain flat at five per cent during the month, it said.

Going forward, a meaningful improvement in the overall consumption scenario remains crucial for industrial activity, say economists.