India has always been one of the biggest markets for smartphones.
Considering the country’s huge population, a vast chunk of which resides in the middle or low income group, affordable smartphones offering powerful features have always been a major focus. But lately, smartphones are becoming very expensive, even in the categories that were known for their reasonable pricing.
According to Counterpoint Research, smartphone prices in India rose 16% on average in the first half of 2026. The average selling price also reached a record $318 (around ₹29,800) in the second quarter.
And it’s not just the flagship brands and models. Budget and midsection phones are also getting more expensive.
Why are smartphone prices rising?
The main reason for increase in smartphone pricing is the cost of components, especially the chips used for RAM and storage.
As tech companies build more AI centres, the demand for these chips has increased and this has put pressure on smartphone manufacturers.
Currency fluctuations has also added to the price. With the Indian rupee falling, the cost of components has increased significantly, even if the phone is being assembled in India.
According to Business Standard, the cost of building a low-end smartphone with specifications similar to a 2025 model increased by approximately 70% in the second quarter of 2026.
Budget smartphones are being hit the hardest
The affordable devices section has taken the biggest hit.
The smartphones priced below ₹10,000 experienced average price increases of approximately 32% during the first half of 2026, according to Counterpoint Research. Shipments in this segment fell 65% compared to 2025, while the ₹10,000–₹15,000 segment declined by 20%.
Manufacturers have also been reducing the specifications to control costs. phones that previously offered 8GB RAM and 256GB storage now come with 6GB RAM and 128GB storage at similar prices.
This means, not only are customers paying more, they are getting less for that money.
Budget brands are moving towards premium phones
The strategy that budget brands maintained by offering better specifications at lower prices is becoming harder to maintain. They are moving to the premium section to have more room to manage rising production costs.
According to IDC, India’s average smartphone selling price reached $302 (around ₹29,300) in the first quarter of 2026, an increase of 10.4% year-on-year.
The ‘budget’ segment could become more important. As smartphone prices continue to increase, the ₹10,000-₹20,000 segment could become increasingly important.
Consumers who previously stuck to budgets below ₹10,000 would need to increase their budget just to get a decent smartphone while those who can’t justify the pricing of the mid-range market may need to drop to the ₹10,000- ₹20,000 section.
This has created an opportunity for brands that can offer reliable performance, good battery life and essential features without pushing prices too high. But a lot of consumers may try to prolong the life of their current devices instead of spending a sizeable chunk of their income on a new one.
The Last Word
A significant reduction in the pricing is unlikely in the near future.
With the frequent currency fluctuations combined with the high memory prices, this pattern is set to continue at least until 2028. For consumers, this may mean fewer affordable options, smaller discounts and longer replacement cycles.
Long story short, the costs of owning a smartphone is increasing and affordability may become the industry’s biggest challenge…
In case you missed:
- No More Budget Phones: India is Buying Premium Phones Now
- From Smartphones to AI Hardware: India’s Next Manufacturing Bet
- How to turn your Old Smartphone into a Home Security Camera
- Elon Musk wants to ensure your phone never loses signal in India
- AI Was Supposed to Save Us Time. Why Are We Just Working More?
- Watching, Not Sharing: Why People aren’t posting on Social Media anymore
- Why Indian Startups Are Building “Vertical AI” Instead of the next ChatGPT
- The Hidden AI Boom Transforming India’s Tech Economy
- India Is Exporting UPI Faster Than Ever. The World Is Buying In
- iPhone 18 might use Satellites for Connectivity!
