Short answer: Smartphone prices in India are rising because of a global shortage of memory chips, caused by AI data centres consuming the world's supply of DRAM and NAND. Brands have raised Indian prices by roughly ₹500 to ₹8,000 depending on the model, and analysts expect the pressure to continue into 2027. It is not inflation and it is not temporary.
What is actually happening
Every smartphone needs two kinds of memory: RAM, which uses DRAM chips, and storage, which uses NAND flash. Both are made by a small number of suppliers — principally Samsung, SK Hynix and Micron.
Those same chips are what AI data centres need, in enormous quantities and at far better margins. As companies build out AI infrastructure, memory manufacturers have redirected capacity towards high-bandwidth memory and server-grade DRAM, because a data centre buyer pays more per wafer than a phone brand does.
Phone manufacturers are now competing for a shrinking pool of supply at elevated prices. That cost lands on the retail tag.
Industry reporting has put the increase in memory component prices at roughly 90 to 120 per cent since late 2025. In budget phones, memory can account for as much as 40 per cent of what it costs to build the device — which is precisely why the cheapest phones have been hit hardest.
How much prices have moved in India
| Measure | What the data shows |
|---|---|
| Average hike per device | Around ₹1,500 across brands as of early 2026 |
| Full range observed | ₹500 to ₹8,000 depending on model |
| Across 21 brands, Jan–May 2026 | 8–12% average increase (Trakin Tech / Techarc) |
| Sub-$200 segment, Q1 2026 | Prices up more than 30% |
| Xiaomi's own warning, late 2025 | DRAM costs could push 2026 prices up 25% |
Some models have been repriced more than once. The OnePlus 15R has been reported as taking three separate increases within five months of launch, ending up around ₹7,000 above where it started.
The pattern matters more than any single number. Brands are not making one correction and settling. They are re-pricing repeatedly as component contracts renew.
The budget segment is being hollowed out
This is the part with real consequences for Indian buyers.
When memory is 40 per cent of a phone's build cost, a brand selling at ₹12,000 has almost no margin to absorb a doubling of that input. It has three options: raise the price, cut the specification, or stop making the phone.
All three are happening. Entry-level devices are creeping upward into brackets they never occupied, RAM and storage configurations are being quietly reduced, and some models are simply not being replaced. A Techarc survey of nearly 6,000 buyers found that a majority of intended festive-season demand may not convert into actual purchases if prices keep climbing at this rate.
For a first-time buyer or a student, the phone that would have cost ₹13,000 last year now either costs ₹16,000 or comes with less memory than it used to.
What smart buyers are doing instead
The market has already started rerouting, and the numbers are striking.
Counterpoint Research estimates India's second-hand smartphone market will grow around 12 per cent in 2026, while new handset sales decline by roughly 11 per cent. Those two lines crossing is the story of this year in Indian mobile.
There is an even more telling signal from the supply chain. Omdia reported that in the first quarter of 2026, display panels shipped to the refurbishment industry overtook those going to new smartphone manufacturing for the first time — roughly 298 million panels versus 289 million. Component suppliers are following demand, and demand has moved.
The logic driving individual buyers is simple arithmetic. If a new mid-range phone costs what a two-year-old flagship costs, the flagship is the better hardware. Better display, better cameras, better silicon, better build. The only thing it lacks is newness.
Why this changes the renewed calculation specifically
A renewed phone is insulated from the memory crisis in a way a new phone is not. The RAM and storage were bought and fitted years ago, at pre-crisis prices. You are not paying 2026 component costs for 2026 components — you are paying for a device whose bill of materials was settled long before AI data centres bid up the market.
That is the structural reason renewed devices look better value now than they did eighteen months ago, and it is not a marketing argument. It is how the supply chain works.
The caveat is that not all renewed is equal. A used phone with an ageing battery and no warranty is not a hedge against anything — it is a different risk. What makes the maths work is a device that has actually been remanufactured: 100% battery health, over 300 quality checks, and an 18-month warranty on Premium Renewed iPhones.
Will prices come back down?
Not soon, on current analyst expectations. IDC has indicated the memory shortage may affect smartphones and PCs into 2027. Counterpoint's view is that memory prices may keep rising through 2026 and beyond.
Waiting for a return to 2024 pricing is not a strategy. It is a bet against every forecast currently on the table.
More on this: the RAM price crisis explained and should you buy a phone now or wait?
Frequently asked questions
Why are phone prices increasing in India in 2026?
A global shortage of DRAM and NAND memory chips, driven by AI data centre demand, has sharply raised component costs. Memory prices have risen roughly 90 to 120 per cent since late 2025, and brands have passed that on through retail price increases.
How much have smartphone prices risen in India?
Increases have ranged from about ₹500 to ₹8,000 per device, averaging around ₹1,500. Across 21 brands between January and May 2026, prices rose 8 to 12 per cent on average, with the sub-$200 segment up more than 30 per cent in Q1.
Will smartphone prices come down in 2026?
Analysts do not expect it. IDC has indicated the memory shortage may persist into 2027, and Counterpoint expects memory prices to keep rising through 2026 and beyond.
Why are budget phones affected most?
Memory can make up as much as 40 per cent of the manufacturing cost of a budget phone, so a doubling of memory prices cannot be absorbed within thin margins. Brands are raising prices, reducing RAM and storage, or discontinuing models.
Are refurbished phones cheaper because of the memory crisis?
Renewed devices contain memory bought at pre-crisis prices, so they are not exposed to current component costs the way new devices are. Counterpoint estimates India's second-hand market will grow around 12 per cent in 2026 while new handset sales decline about 11 per cent.
