India’s mobile phone market value rises despite falling volumes

India’s mobile phone market is projected to expand in value despite falling handset volumes, as buyers move from feature phones to higher-priced smartphones and upgrade within the smartphone category. Total shipments fell to 195 million units in FY2026, yet market value is forecast to grow at a 9.2% compound annual growth rate, or CAGR, to Rs 5.198 lakh crore by FY2030.

Why can India’s mobile phone market grow when shipments are declining?

India’s mobile phone market can grow because the decline is concentrated in low-value feature phones while smartphone sales carry higher average selling prices. Total handset shipments fell from 207 million units in FY2024 to 205 million in FY2025 and then to 195 million in FY2026. The FY2030 projection is 196 million units, showing that projected value growth does not require a substantial recovery in total device volumes.

The value mechanism is the average selling price, or ASP, which is the average revenue per handset sold. India’s mobile phone market rose from Rs 2.053 lakh crore in FY2019 to Rs 3.226 lakh crore in FY2024. The FY2030 forecast of Rs 5.198 lakh crore is attributed to higher smartphone ASPs, rising fifth-generation, or 5G, device penetration, and replacement purchases of phones with more advanced cameras, chipsets and software features.

Smartphone shipments increased by 6 million units between FY2024 and FY2026, while feature-phone shipments fell by 18 million units over the same period. The source identifies feature phones as a high-volume, low-value category. Their decline therefore lowers aggregate unit sales more sharply than it lowers market value, provided smartphone demand and prices continue to rise.

How does the feature-phone-to-smartphone shift raise value?

The feature-phone-to-smartphone shift is the main change in India’s mobile phone market mix. Feature-phone volume fell 11.5% in FY2025 and 20.4% in FY2026, whereas smartphone volume grew 3.4% in FY2025 and 0.7% in FY2026. Smartphones represented 152 million of the 195 million handsets shipped in FY2026, compared with 146 million of 207 million in FY2024.

Smartphone value grew 8.7% from FY2025 to Rs 3.614 lakh crore in FY2026, while feature-phone value fell 20.4% to Rs 4,300 crore. The source links smartphone demand to fourth-generation and 5G adoption, camera-focused models and artificial intelligence, or AI, functions. It also cites feature phones’ limited compatibility with Unified Payments Interface, or UPI, and over-the-top, or OTT, applications as a factor reducing their relevance.

Replacement demand is central to this shift because mobile-phone penetration was estimated at 77% in FY2025 and the average smartphone replacement cycle was 36 months or longer. First-time buyers remain mostly concentrated in feature phones, while existing smartphone users determine a larger share of future demand. The value forecast therefore depends on replacement buyers continuing to choose smartphones and on smartphone owners trading up rather than relying mainly on pre-owned phones.

Which price bands are lifting India’s mobile phone market value?

Higher-priced segments are lifting India’s mobile phone market value faster than the overall market. The premium segment, priced from Rs 51,000 to Rs 68,000, grew 36.8% from FY2025 to FY2026 and is projected to reach Rs 74,800 crore by FY2030. Its forecast CAGR of 13.3% from FY2026 to FY2030 exceeds the 9.2% CAGR forecast for the total market.

The super-premium segment, above Rs 68,000, grew 8.1% in FY2026, while the mid-premium segment, priced from Rs 34,000 to Rs 50,000, is projected to reach Rs 55,100 crore by FY2030 at an 11.6% CAGR. Entry-premium phones, priced from Rs 17,000 to Rs 34,000, provide an upgrade path from the Rs 8,500-to-Rs 17,000 mass-budget category through 5G connectivity, AI functions and higher-refresh-rate displays.

The first half of 2026 launch data indicates manufacturers’ focus on these bands. The selected brands introduced 48 new 5G models: 18 in entry premium, nine in mid premium, five in premium and 11 in super premium. They introduced five mass-budget models and none below Rs 8,000, meaning the planned product mix is weighted toward categories that support higher average selling prices.

What could limit India’s mobile phone market value growth?

Higher memory costs and weaker entry-level demand could limit India’s mobile phone market value growth. Smartphone shipments fell 8.6% to 64 million units in the first half of calendar year 2026 from 70 million units in the first half of calendar year 2025. The source attributes the decline to memory-cost inflation, which increased prices for entry-level and mass-budget 5G phones and shifted some price-sensitive buyers to fourth-generation devices or pre-owned phones.

India’s smartphone ASP reached USD 282 in calendar year 2025, compared with a forecast global ASP of USD 434. This difference indicates scope for upgrades, but it also makes affordability relevant to the outlook. The forecast requires consumers to accept higher prices for improved hardware and software features despite input-cost pressures in the lower-price categories.

Consumer finance is one mechanism supporting affordability. New consumer-durable loans rose from Rs 87,463 crore in FY2022 to Rs 1.777 lakh crore in FY2026, a 19.4% CAGR, while an estimated 42% of smartphone sales were financed in FY2026. No-cost equated monthly instalments, or EMIs, buy-now-pay-later arrangements and trade-ins lower upfront payments, so continued availability of finance is material to premium and entry-premium upgrades.

How do retail channels support premiumisation?

Offline modern trade is expected to gain from premiumisation because higher-priced purchases can benefit from product demonstrations, exchange offers and assisted finance. Modern trade was valued at Rs 92,500 crore in FY2026 and grew 16.9% year on year, compared with online sales of Rs 1.463 lakh crore, which grew 4.2%. The source forecasts a 14.9% CAGR for modern trade through FY2030, compared with 8.5% for online sales.

Geographic expansion also broadens the potential market for upgrades. Tier I cities, metros and mini metros accounted for 64.6% of India’s mobile phone market value in FY2026, but tier II cities are projected to grow at a 10.1% CAGR from FY2026 to FY2030, marginally above tier I cities’ 10.0%. Store networks, no-cost EMIs and local after-sales support are identified as mechanisms that can extend premium and entry-premium purchases beyond the largest cities.

Conclusion

India’s mobile phone market is becoming more value-led because smartphones are taking share from feature phones and buyers are moving into higher price bands. Total handset shipments are projected to be almost unchanged between FY2026 and FY2030, but smartphone shipments are forecast to increase from 152 million to 161 million units as feature-phone shipments decline from 43 million to 35 million units.

The next measures to watch are entry-level demand after the 8.6% first-half calendar year 2026 smartphone shipment decline, the availability of consumer financing and the pace of 5G launches in premium tiers. The FY2030 forecast is based on continuing upgrades, higher ASPs, expanding 5G adoption and demand for AI-integrated devices, particularly in tier II and smaller cities.