Ahead of the announcement of the Union Budget 2026-2027, there is one question being asked across the tech industry. Whether or not smartphone prices will increase this year? Multiple stakeholders including consumers, experts and even smartphone manufacturers are anticipating the Budget for his very reason. Since India is the world’s second largest smartphones market and which has made smartphone’s a necessity in people’s increasingly digital everyday life. The question of smartphone’s becoming cheaper or expensive is pivotal for the smartphone industry.
Why will prices be affected this year?
For the last 2-3 years a lot of Indian smartphone companies are entering the smartphone market and biting the chunky market share of Chinese smartphone makers. This had forced the latter to decrease the prices of thier devices marginally. However the same may not be true this year due to chipsets becoming expensive due to increasing demand from AI companies. Additionally supply chain issues due to levy of tariffs might have it’s impact on smartphones prices.
What should be the focus of Union Budget?
According to experts in the industry it is high time that India focussed on becoming a key manufacturer core smartphone components such as camera modules, batteries, printed circuit boards (PCBs) and other critical parts. With this India will become a strategic part of the supply chain. Greater emphasis is also needed on research and development, system design, and software-driven innovation.
“This budget we expect the government to take a lenient view about the smartphone industry and give some respite by lowering GST rate on smartphones. This will allow OEMs to absorb some degree of price fluctuations due to very uncertain supply chain. It may not help in reducing the phone costs but absorb some level of expected price increases allowing consumers especially in entry to mid level to upgrade to 5G experiences,” Faisal Kawoosa of TechARC told Financial Express.
Currently, while most smartphones are assembled in India, key components are still imported. Industry players argue that targeted tax incentives and policy support in the budget could encourage domestic manufacturing of these components. Such measures could help contain costs, keep smartphone prices stable, and, in some cases, even lead to price reductions.
“We believe this budget might focus on smartphone component manufacturing in the country rather than smartphone assembling. Assembling in the country has already taken a solid foothold over the recent years. Now to take things to next level, it is key that manufacturing of components take centre stage. This might bring down the prices of these components. And this will also address the issue of rising smartphone prices due to memory shortage,” Abhilash Kumar, Senior Industry Analyst at TechInsights noted.
In short, while immediate and steep price cuts may be unlikely due to global supply pressures, the direction set by the Union Budget could play a crucial role in determining whether smartphones become more expensive, or more affordable, in the long run.
“Retailers are pushing for a GST cut on entry-level phones (sub- INR 10,000) from 18% to 5% to offset increase in prices of smartphones. The industry is also vying for a reduction in Basic Customs Duty (BCD) on critical components as OEMs might be able to absorb rising memory costs rather than passing on the price hike to consumers. Also, the industry may look for a renewal of the existing PLI scheme or in a revamped form to complement the scheme on components,” Tarun Pathak, Research Director at Counterpoint Research concluded.