India Smartphone Price Hike: There is a big news for Indian consumers who are looking to buy a new smartphone before the festive season. According to a recent report by Counterpoint Research, the average retail price of smartphones in India is likely to increase by a whopping 21% in the year 2026. This is the fastest price increase compared to all major markets in the world. Globally, average prices increased by 15%, with 5% in the Americas, 7% in Europe and 10% in China, while the Asia-Pacific region saw a jump of 19%.

Why price hike has the biggest impact on the Indian smartphone market?

Budget and mid-range smartphones under ₹20000 account for over 51% of the Indian market. Premium phones are sold more in western countries, where telecom companies bundle phones with plans and because of higher margins, the companies bear the extra cost themselves. However, budget phones have very low profit margins, so as production costs increase, companies have passed the financial burden directly on to Indian consumers.

Rising demand for AI memory and chip shortages are the main reasons

The main reason behind such a huge increase in prices is the expensive memory of smartphones. DRAM and NAND chip prices have increased nearly 4 times since September 2025. Due to the high demand for artificial intelligence (AI) infrastructure worldwide, semiconductor manufacturers are now focusing on the memory production required for AI servers. This has reduced the supply of traditional memory chips used for typical smartphones. The share of memory alone has increased to over 45% of the total cost of making a phone priced below ₹15000.

Budget phone sales drop by 45%

Budget phones becoming more expensive has had a direct impact on sales. Smartphone sales below ₹15,000 have registered a massive 45% decline in the June quarter. New smartphone models launched in 2026 are up to 25% more expensive than last year’s models. According to Counterpoint Research’s consumer survey, 46% of buyers are now upping their budget for phones, while 25% have postponed purchases and 29% of consumers are choosing to buy refurbished (used/second-hand) phones.