Budget 2026: Will smartphones get costlier after February 1?
What's the story
As the Union Budget nears, consumers and industry experts are left wondering if smartphone prices will rise or fall. Smartphones have become a basic necessity in today's world, making them a key focus of this conversation. Last year, several Indian brands entered the market and challenged Chinese companies. While most kept prices steady, Samsung raised some models' prices toward the end of the year.
Market pressures
Global AI demand and component shortages impact smartphone production costs
Industry experts have said that the rising global demand for artificial intelligence has resulted in a shortage of key components such as memory chips. This has put pressure on global supply chains and increased production costs for smartphone manufacturers. The situation leaves these companies with little leeway to absorb costs without raising prices. However, they are also wary of making smartphones unaffordable as it could upset market dynamics and affect demand.
Industry insight
Former Realme CEO emphasizes need for deep value creation
Madhav Seth, former CEO of Realme and current CEO of AI+ Smartphones and founder of Nxtquantum Shift Technologies, has said that India's technology sector is at a turning point. He believes this shift will go beyond simple assembly to meet the growing demand for AI-integrated devices. Seth thinks the Union Budget should focus on promoting deep value creation instead of just assembly-led growth.
Manufacturing push
Experts advocate for domestic manufacturing and innovation
Experts have stressed the need for India to move up the value chain by manufacturing core smartphone components such as camera modules, batteries, printed circuit boards (PCBs), and other critical parts. They also emphasize on research and development, system design, and software-driven innovation. Currently, while most smartphones are assembled in India, key components are still imported.
Policy support
Targeted tax incentives could encourage domestic manufacturing
Industry players have argued 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 even lead to price reductions in some cases. In conclusion, 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 future smartphone pricing trends.