Union Budget 2026: Will smartphone prices skyrocket from February 1? Experts reveal

Union Budget 2026 is just around the corner, and hence, both industry watchers and consumers are keenly watching for signs of how it might affect electronics and smartphone prices. Smartphones have become essential devices in daily life, and any change in their cost has a direct impact on millions of users across India. The central question now is whether the upcoming budget will push prices higher or help keep them stable.

What Experts Are Saying

Industry experts point out that global demand for artificial intelligence (AI) technologies is influencing smartphone pricing. Key components like memory chips are in short supply because they are also needed for AI applications in data centers. This has increased production costs for smartphone manufacturers worldwide. While companies could absorb some of these costs, many are wary of raising prices too much, as it could affect demand and disrupt market balance.

Experts suggest that while immediate steep price hikes may not be likely, the overall trend depends on the policy measures announced in the Union Budget. Strategic tax incentives or subsidies for domestic manufacturing could help stabilize costs and even bring some relief to buyers.

Mr. Madhav Sheth, CEO, Ai+ Smartphone and Founder, NxtQuantum Shift Technologies says-

“Whether smartphones become more expensive after February 1 will largely depend on how the Union Budget addresses India’s electronics manufacturing ecosystem.”

He further says, “AI-enabled smartphones are getting more complex and cost-intensive and if we keep relying on imported components, price pressure will eventually hit consumers. This Budget must push us beyond assembly to real depth, domestic manufacturing of camera modules, batteries, PCBs, enclosures, chargers and wearables, along with system design, software-led innovation, R&D and IP creation.”

“A resilient local supply chain isn’t optional anymore; it’s essential to reduce dependence on China and keep India globally competitive”

The Need to Boost Domestic Manufacturing

India currently assembles most smartphones domestically, but key components such as batteries, camera modules, and printed circuit boards (PCBs) are still imported. Experts emphasize that promoting local production of these critical parts is vital for long-term price stability. Greater investment in research and development, system design, and software innovation can also strengthen India’s smartphone industry and reduce dependence on imports.

Why Smartphone Prices Have Increased

Recent price increases are largely driven by the rising demand for AI-related components. Memory chips, which are essential for both smartphones and AI data centers, have become scarce, pushing costs higher. Additionally, some international smartphone brands, like Samsung, raised prices on select models towards the end of last year, adding to the trend.

Independent Tech Analyst Yogesh Brar says-

“The Indian consumer tech market is at a critical juncture for Budget 2026. Global price hikes in memory components, driven by AI data center demand, have significantly inflated production costs, with some memory prices surging over 160%. This ‘AI Tax’ is forcing double-digit price hikes on smartphones and laptops, directly hitting middle-class affordability and cooling replacement cycles. Brands are cutting losses and are concerned for 2026. That said, to safeguard our digital momentum, rationalizing GST is now a strategic necessity. Reducing the current 18% GST slab to 12% for these essential productivity tools like smartphones, tablets & laptops would provide a vital fiscal buffer. Such a move would effectively offset inflationary pressure from rising component costs for manufacturers while keeping devices accessible for consumers.”

Techarc, Technology analyst and consultant, Faisal Ali Kawoosa says-

“The entire industry has big expectations from this upcoming budget, especially at a time when global supply chain is pushing up costs along with continuous depreciation of rupee against the dollar. This is hurting the cost of manufacturing of smartphones and if all the burden is put on consumers, the market will only shrink. This is not only going to affect the consumers but the entire digital landscape where smartphone is central to everything. I am expecting the Union Budget 2026 recognising these hardships and give relief in the form of rationalising GST especially on 5G smartphones priced below Rs 20,000.  Our 5G migration has started a couple of years ago and this is the time now when entry level market is due for switching to 5G. Even if the smartphones may not become cheaper across price tiers, the budgetary relief in the form of GST reduction, etc., should allow OEMs to minimise the burden on ordinary consumers.”