India’s smartphone market is facing a significant slowdown in 2026 after a largely flat performance last year.
Annual shipments are projected to decline between 12% and 15%, based on preliminary data from International Data Corporation cited by Moneycontrol.

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The forecast marks a sharp revision from an earlier estimate of 4% growth. In 2025, smartphone shipments rose marginally by 0.5% to 152 million units.

If the revised projection holds, 2026 would record the steepest annual decline in recent years.
This would exceed the 10% year-on-year fall recorded in 2022, when shipments dropped to 144 million units.

Supply And Cost Pressures

The downturn is being driven by a tightening global supply environment. A chip shortage that intensified toward the end of last year has constrained component availability.

The supply squeeze has been compounded by rising input costs. Memory and storage components have seen sharp price increases. Currency volatility has further added to cost pressures for manufacturers.

As a result, smartphone makers have been raising prices across models since November. Price hikes have continued into February across major brands operating in India.

Impact Across Segments

Android smartphones are expected to absorb most of the impact from the slowdown. The sub-$200 segment, which accounts for more than 55% of total volumes, is likely to be hit the hardest.

Higher average selling prices are expected to accompany the decline in shipments. In some cases, price increases may outpace the fall in volumes.

Premium and mid-premium segments are expected to continue expanding. However, growth in these categories is likely to be slower than earlier expectations.

Apple’s iPhones are expected to remain comparatively resilient. Shipments of iPhones are projected to post mid-single-digit year-on-year growth.

Industry Adjustments

Several smartphone makers have trimmed sales volume targets by up to 20%. Manufacturers are increasingly prioritising value growth over unit volumes.

Larger original equipment manufacturers with scale advantages are better positioned to manage higher costs. Smaller brands may face operational strain amid rising bills of materials.

Affordability schemes such as no-cost EMIs and exchange offers continue to support near-term demand. However, weakening purchasing power is expected to weigh on mass-market demand by mid-year.

Outlook For 2026

The first quarter of 2026 saw multiple flagship and high-volume launches. Industry participants expect a more pronounced slowdown to emerge from the second quarter.
Component shortages are projected to persist into the first half of 2027. Some brands are holding back inventory in anticipation of further price increases.

Retailers are facing higher working capital requirements as securing stock becomes more challenging. Consumers are increasingly delaying purchase decisions amid rising ownership costs.

The market is entering a period marked by constrained supply, higher prices, and softer demand across key volume segments.