As Finance Minister Nirmala Sitharaman presents Budget 2026–27, concerns are rising over possible smartphone price hikes. Analysts cite higher global chipset and memory costs, tariffs, and supply disruptions. Experts say prices may rise if cost pressures aren’t addressed, but tax relief, GST cuts, or manufacturing incentives could help stabilise prices, especially for budget phones.

India' Finance Minister Nirmala Sitharaman is all set to present the Union Budget 2026-2027 today, and the tech industry and consumers are all speculating on whether smartphones will become pricier. With India being the world's second-largest smartphone market, and now increasingly becoming a manufacturing hub for phones as well, any shift in pricing could have widespread implications. Factors such as rising global chipset costs driven by AI demand, supply chain disruptions, and tariffs are fuelling concerns. However, Indian manufacturers have managed to lower prices in recent years by gaining ground over Chinese competitors, though experts warn this downward trend may stall without supportive policies.

Will smartphone prices rise after Budget 2026?

Speculation is rife that smartphones could indeed become more expensive post-budget, if it fails to address key cost drivers. Industry analysts point to escalating expenses for components like memory chips, exacerbated by global shortages and tariffs. Without interventions, original equipment manufacturers (OEMs) might pass these hikes onto consumers, particularly in the entry-level and mid-range segments. On the flip side, if the budget prioritises domestic manufacturing and tax relief, prices could stabilise or even dip in the long term. Retailers have voiced fears of upward pressure on sub-Rs. 10,000 devices, urging measures to cushion the blow for budget-conscious buyers.

What experts expect from the Budget 2026

Experts are optimistic about a consumer-friendly approach in the budget, emphasising the need for policies that bolster India's smartphone ecosystem. Faisal Kawoosa, founder of TechARC, highlights the importance of a 'lenient view' on the industry to help OEMs manage volatile supply chains. "The global supply chain of smartphones and other gadgets is at an all time high unreliability which could make it extremely challenging for OEMs to decisively plan their portfolio this year affecting availability of smartphones and other gadgets, especially for low to mid tier segments," TechARC analyst Faisal Kawoosa told Free Press Journal.

"It is imperative that the Union Budget 2026-2027 takes cognizance of this volatility and gives some comfort room to OEMs to accommodate and absorb some level of this volatility without passing everything to the consumers," he added.

Experts even call for slashing of Basic Customs Duty (BCD) on vital components, allowing manufacturers to absorb rising memory costs without burdening buyers. Industry even stresses on shifting focus from mere assembly to producing components like camera modules, batteries, and PCBs domestically, which could contain costs and resolve shortages.

GST rate cut on smartphones the horizon?

A key expectation revolves around a potential GST rate cut, which experts believe could be a game-changer for affordability. Currently at 18 percent, GST on smartphones - especially entry-level models under Rs. 10,000 -could be reduced to 5 percent, as advocated by retailers. Such a move would help offset any price increases from global factors and make devices more accessible. Experts note that lower GST rates would empower OEMs to handle fluctuations better, indirectly benefiting consumers. Industry bodies are pushing for this, alongside renewing the Production-Linked Incentive (PLI) scheme, to foster local manufacturing and keep prices in check.

This year's Budget is extremely important - it could propel India towards becoming a major player in the global supply chain. In the short term, steep price drops are unlikely amid global pressures, but targeted incentives might prevent hikes and encourage upgrades. Altenatively, inaction might lead to higher costs, slowing market growth in a sector already pivotal to India's economy.