Buying a new smartphone has become noticeably more expensive in India this year. According to a recent study by market research firm TechArc, the average retail price of smartphones increased by 7.9% between January and May 2026, marking a significant shift after nearly a year of stable pricing.

The report suggests that entry-level and lower mid-range smartphones experienced the sharpest price increases, putting additional pressure on consumers looking for affordable devices.

Meanwhile, the Central Government has announced a new manufacturing initiative for the mobile phone industry, raising hopes that increased domestic production and incentives for manufacturers could help stabilize prices in the coming years.

Smartphone Prices Rise After a Stable 2025

According to the TechArc study, India's smartphone market remained relatively stable throughout most of 2025, with frequent discounts helping consumers purchase devices at competitive prices.

However, the pricing trend changed considerably during the first five months of 2026.

Researchers tracked the monthly retail prices of 165 smartphone models across 22 brands launched in 2025. The analysis found that average handset prices climbed 7.9% between January and May this year.

The report also highlighted that the largest increases were seen in:

• Budget smartphones

• Entry-level 5G devices

• Lower mid-range smartphones

These categories are typically the most popular among price-conscious buyers, making the increase particularly significant for everyday consumers.

Government Announces New Mobile Manufacturing Scheme

In an effort to strengthen India's electronics manufacturing ecosystem, the Union Cabinet has approved the Mobile Phone Manufacturing Scheme (MPMS).

The new initiative carries a proposed outlay of ₹62,500 crore and is expected to remain in effect for the next five years.

According to Union Minister Ashwini Vaishnaw, the scheme will provide financial incentives to eligible companies based on:

• Research and Development (R&D)

• Domestic sourcing of components

• Expansion of local manufacturing

• Growth in smartphone exports

The objective is to encourage manufacturers to produce more components and finished smartphones within India rather than relying heavily on imports.

How Could the Scheme Affect Smartphone Prices?

While the scheme is not expected to reduce smartphone prices immediately, industry observers believe it could help lower manufacturing costs over time.

Greater domestic production, increased localization of components, and incentives for manufacturers may improve supply chain efficiency and reduce dependence on imported parts.

If production costs decline in the long run, manufacturers may be in a better position to offer competitively priced smartphones, although retail prices will also continue to depend on global component costs, currency movements, taxes, and market demand.

Government Sets Ambitious Production Target

The Centre has set an ambitious goal under the new manufacturing initiative.

Officials expect the scheme to support the production of mobile phones worth approximately ₹39 lakh crore during its implementation period.

For comparison, the earlier Production Linked Incentive (PLI) programme reportedly facilitated smartphone production worth around ₹22 lakh crore.

The new target reflects the government's broader strategy to position India as a major global manufacturing hub for smartphones and electronics.

Industry Study Highlights Changing Market Trends

The TechArc report suggests that the smartphone market has entered a different pricing phase compared with last year.

According to the study, buyers in 2025 benefited from frequent promotional offers and stable prices, whereas 2026 has seen a noticeable upward trend across several price segments.

Commenting on the findings, TechArc Co-founder and Chief Analyst Faisal Kawoosa noted that 2025 was largely characterized by discounts, while 2026 has brought a significant shift in smartphone pricing.

What Consumers Should Expect

Consumers planning to purchase a new smartphone may continue to see price variations depending on:

• Brand strategy

• Storage variants

• Import costs

• Component availability

• Festival discounts

• Market competition

Although the government's manufacturing initiative is aimed at strengthening domestic production and improving long-term competitiveness, any impact on retail pricing is likely to emerge gradually rather than immediately.

Final Takeaway

The latest industry data indicates that smartphone prices in India have risen by nearly 8% in just five months, particularly affecting budget-conscious buyers. At the same time, the government's newly approved ₹62,500 crore Mobile Phone Manufacturing Scheme aims to boost local production, encourage innovation, and expand exports.

While the initiative could help improve manufacturing efficiency and strengthen India's electronics sector over the coming years, consumers may need to wait before any meaningful impact is reflected in smartphone retail prices.

Disclaimer: The price trends mentioned in this article are based on findings published by market research firm TechArc. Actual smartphone prices may vary across brands, retailers, promotional offers, and regions.