The Indian smartphone market is undergoing significant transformations in 2025, driven by shifts in consumer preferences, manufacturing strategies, and government policies. These changes are shaping the landscape of one of the world’s most dynamic smartphone markets. Market Growth and Premiumization In 2024, India’s smartphone market experienced a 4% year-over-year growth, with shipments reaching 151 million units. This growth is projected to continue, with expectations of a 5% increase in 2025. Notably, the market’s value is anticipated to surpass $50 billion in 2025, driven by a consumer shift towards premium devices. The average selling price (ASP) of smartphones in India is expected to exceed $300 for the first time, reflecting consumers’ increasing preference for high-quality, feature-rich devices. Manufacturing Expansion and Policy Support Global smartphone giants are intensifying their manufacturing efforts in India. Apple, for instance, has significantly increased its production in the country, with exports rising markedly. The company now manufactures high-end models like the iPhone 16 Pro locally, contributing to mobile phones becoming India’s largest export, surpassing traditional sectors like diamonds. This expansion aligns with India’s “Make in India” initiative, which offers incentives to boost local manufacturing. Similarly, Dixon Technologies, the assembler of Google’s Pixel smartphones, is expected to more than double its revenue in the current fiscal year due to the surge in local electronics manufacturing. This growth is propelled by global companies shifting their production chains from China to India, attracted by favorable policies and a burgeoning domestic market. Policy Reforms and Investment Inflows The Indian government has implemented several policy reforms to attract investments and reduce dependency on imports. In February 2025, import duties on essential smartphone components were eliminated, benefiting local manufacturing efforts and companies like Apple and Xiaomi. This move aims to support India’s growing electronics industry, which has more than doubled to $115 billion in six years, positioning the country as the second-largest mobile phone manufacturer globally. Additionally, the Production-Linked Incentive (PLI) scheme has successfully attracted over $17 billion in investments since its launch in 2020. This initiative offers cash incentives to manufacturers across various sectors, resulting in production worth approximately 11 trillion rupees and nearly one million new jobs. The scheme has been pivotal in establishing India as a global electronics manufacturing hub, particularly in smartphone production. Shifts in Market Leadership The competitive landscape of the Indian smartphone market is also evolving. In 2024, Vivo led the market, while Apple entered the top five brands for the first time, ranking fourth in overall smartphone shipments. Apple’s ascent is attributed to a 34% increase in iPhone shipments, reflecting the brand’s growing appeal among Indian consumers. The Indian smartphone market in 2025 is characterized by robust growth, a shift towards premium devices, expanded local manufacturing, and supportive government policies. As global brands deepen their presence and consumers continue to seek advanced features, India is solidifying its position as a pivotal player in the global smartphone industry.

The Union Budget 2025-26 introduces significant measures designed to enhance manufacturing and export competitiveness within the electronics sector, with the goal of putting India’s mobile and electronics industry on the global map. Key Announcements and Their Impact Tariff Rationalization: The budget emphasizes strengthening India’s electronics manufacturing ecosystem through the rationalization of tariffs on key inputs and components, creating a more competitive cost structure and encouraging deeper integration with global value chains. Removal of BCD on Mobile Inputs/Parts: The removal of the 2.5% Basic Customs Duty (BCD) on major mobile inputs/parts or sub-parts for Printed Circuit Board Assembly (PCBA), Camera Module, Connectors, Wired Headsets, Microphone and USB Cables, Fingerprint Reader and Scanners is a welcome step. This move will enable manufacturing, remove ambiguity, and increase the competitiveness of manufacturing. IFPD Duty Correction: The correction of the 20% duty on Interactive Flat Panel Displays (IFPD) aligns the display with the color television category, which will increase local manufacture and assembly. BCD Rationalization for Open Cell of LCD/LED Panels: BCD rationalization from 2.5% to Nil on inputs and parts for manufacturing open cells of LCD/LED panels will boost domestic manufacturing of open cells by creating a reasonable differential duty between the finished open cell and its parts. Lithium-Ion Cell Battery Waste: Reduction of BCD on Lithium-Ion Cell battery waste from 5% to Nil will make the industry very competitive and enable the recycling of battery waste for the extraction of critical materials. Broad-basing of Materials for Mechanical Parts: The budget has broad-based the materials that can be imported duty-free in the manufacturing supply chain to include all possible materials and their components and alloys and composites. This modification recognizes the relentless march of technology and innovation formulations in the mechanical parts of mobile phones. Touch Panel/Cover Glass Assembly: The omission of Touch Panel/Cover Glass Assembly for use in the manufacture of mobile phones removes confusion and facilitates the manufacturing of display assembly. Exemptions on Capital Goods: Exemptions of BCD on specified capital goods for manufacturing lithium-ion cells for EVs and mobile phones will enable building Lithium Ion cell manufacturing capabilities in India and enhance competitiveness. Direct Tax Liberalization: Increasing the exemption slabs for personal income tax will support consumer products such as smartphones, laptops, color televisions, and other electronics. Export Promotion and National Manufacturing Missions: Setting up of Export Promotion Mission and National Manufacturing Mission will strengthen India’s manufacturing capabilities by creating a business-friendly environment, ensuring access to advanced technology, developing a skilled workforce, and providing easy access to export financing. Overall Impact and Implications Enhanced Competitiveness: The rationalization of tariffs on key inputs and components creates a more competitive cost structure and encourages deeper integration with global value chains. Supply Chain Resilience: Duty exemptions on critical minerals and capital goods reinforce supply chain resilience and help India compete effectively in international markets, attracting higher foreign investment. Boost to Domestic Consumption: Measures like the enhanced income tax rebate under the new tax regime will boost disposable incomes, stimulating domestic consumption, a key driver for electronics demand. Attracting Investments: These initiatives reflect a strategic push towards achieving the Prime Minister’s vision for USD 500 billion of electronics manufacturing by 2030 and provide an impetus for domestic value addition, export growth, and job creation. Global Positioning: By aligning policies with global standards and supporting large-scale manufacturing, India is well-positioned to achieve its ambitious targets and solidify its place on the global stage.