The AI-led rise in phone prices continues to hit Indian customers

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As smartphone prices rise due to excess demand for memory chips from AI companies and data centers, phone vendors have seen their customer base dry up significantly in India. “This is the first time in 20 years that I have seen the prices of phones going up and up relentlessly,” said Vivek Singh, 42, a phone seller in South Delhi who has been in the business for decades, at his shop. “Ten or fifteen people come into the store every day and only one or two buy a phone,” he said.

Since February, phone makers have been sending price hike alerts to retailers, which have been increasing gradually. The Hindu received such notifications from Vivo, Samsung, Realme, Oppo, Nothing, Poco and Xiaomi from the All India Mobile Retailers Association (AIMRA). The price hikes ranged from ₹1,000 to ₹5,000, but that’s only the latest tranche. “People are asking me for ₹10,000 phones, but nothing like that exists anymore,” fumed Mr Singh, noting that the prices of some cheap phones had more than doubled.

The results of these hikes haven’t been all doom and gloom, at least not yet. Kailash Lakhyani, AIMRA founder, chairman, told The Hindu that retailers are starting to see better prices for the used phones they got during counter purchases and that retailers who had already bought stock at the old dealer prices were benefiting from higher margins at the newer prices. A review of price hike notices showed that for some sellers, their margins on some Samsung phones jumped from 3.85% to more than 14%.

“Overall, 60% of phones are purchased,” claimed Mr. Lakhyani. “20% of customers settle for less powerful phones or buy second-hand and 20% of customers below wait for the festival season and hope for discounts,” he added. “There is also talk of a cut in GST for smartphones, so some customers are waiting for that,” Mr Lakhyani said. GST on smartphones is 18%.

But this situation can worsen. “We have been in touch with the phone companies and they say this situation could last until 2028 or even 2030,” Mr Lakhyani said. “Next year there will also be footfalls, but it may be a plane rather than a rocket (like this year),” he added.

The phenomenon is global, as the memory chip crisis driven by AI demand has affected electronics supply chains across the board. “Global shipments of sub-$200 smartphones are expected to decline by 40% between 2025 and 2030,” Counterpoint Research, a smartphone sales analysis firm, said on Thursday, September 24th. Price-sensitive markets like India, Africa, Latin America and parts of Asia are feeling it the most, said Neil Shah, founder of Counterpoint, on X, formerly Twitter. “Connectivity, digital inclusion and exchange cycles in emerging markets are taking a long-term hit,” Mr Shah said.

Published – 25 Sep 2026 23:24 IST