Could Smartphones in India Get Cheaper? Here's Why the Government's New Tax Move Matters

If you've noticed smartphones becoming more expensive over the past year, you're not alone. The biggest reason isn't inflation, it's a global shortage of memory chips. Surging demand for AI servers and data centres has driven up the prices of DRAM and NAND flash memory, forcing smartphone makers to either absorb higher component costs or pass them on to consumers.

Several brands, including Apple, Samsung, Xiaomi, and others, have already increased prices or reduced discounts as memory costs continue to climb. With analysts expecting memory prices to remain elevated through 2026, smartphones are unlikely to become cheaper anytime soon.

Government's Tax Relief Could Ease Future Price Hikes

This is where the Indian government's latest customs duty reforms could make a difference.

To strengthen domestic electronics manufacturing, the government has removed import duties on several key smartphone and electronics components until March 31, 2029. The exemptions cover parts used in wireless charging systems, lithium-ion batteries, and display assemblies, helping manufacturers reduce production costs while encouraging greater local assembly.

Although the move is unlikely to reverse rising memory prices, it could help offset some of the additional costs manufacturers are facing. Over time, that may reduce pricing pressure on future smartphones, particularly premium models assembled in India.

Will Smartphone Prices Finally Drop?

Not immediately. The latest duty cuts mainly benefit premium smartphone components, including wireless charging modules, premium magnets, nano-crystalline materials, and inductor coil assemblies. These parts are commonly found in flagship smartphones rather than budget or mid-range devices, meaning companies making premium phones stand to gain the most.

While the savings may not fully offset rising memory costs, they could help manufacturers limit future price hikes or offer more competitive pricing on flagship models.

Battery Production Could Be the Real Game-Changer

The biggest long-term impact may come from battery manufacturing.

The Central Board of Indirect Taxes and Customs (CBIC) has expanded customs duty exemptions to 85 categories of machinery used for lithium-ion battery production. By simplifying imports of specialised manufacturing equipment, the government hopes to attract investments in local battery factories.

As battery production shifts closer to home, manufacturers could reduce dependence on imported components, lowering costs across smartphones, laptops, wearables, and electric vehicles.

Strengthening India's Electronics Supply Chain

The government has also waived duties on several display assembly inputs, although these currently apply to industrial, automotive, and medical displays rather than smartphone screens.

Even so, the broader objective is clear: build a stronger domestic electronics ecosystem. India has already increased smartphone manufacturing 28-fold over the past decade, reaching ₹5.45 lakh crore during FY2024-25. The latest reforms are expected to accelerate that growth by giving companies greater confidence to invest in local production.

While consumers shouldn't expect cheaper smartphones overnight, especially with AI-driven memory shortages continuing to push up component prices, the new duty exemptions could soften the impact of future price increases. Over the next few years, greater localisation, stronger supply chains, and lower manufacturing costs may finally help make smartphones more affordable in India.