India's smartphone market set to grow over favorable economic outlook, global interest in Indian manufacturing: Report

New Delhi [India], May 1 (ANI): India's smartphone market is expected to grow at a low single-digit rate this year, driven by a favorable economic outlook and increasing global interest in Indian manufacturing, market intelligence research firm Counterpoint Research asserted.
The central government has been aggressively promoting indigenous manufacturing of mobile phones. It also provides incentives to the manufacturers to set up shops in India.
Lower tariffs compared to China and Vietnam are positioning 'Made in India' devices as a more cost-effective option for US importers, while the potential for enhanced bilateral trade between the US and India could further strengthen the country's appeal as a global smartphone manufacturing hub, the research firm said in a report.
In the first quarter of 2025, India's smartphone shipments, however, declined - by 7 per cent year-on-year, according to the latest research from Counterpoint's Monthly India Smartphone Tracker.
The research firm noted that high inventory levels impacted shipments during the first quarter. Besides, there was a 26 per cent drop in the number of new launches.
Senior Research Analyst Prachir Singh said, "In Q1 2025, India's smartphone market shifted its focus towards preparing for more sustainable and structured growth. Key brands, dealing with high inventory levels, prioritized clearing excess stock to stabilize operations and set a stronger foundation for the remainder of the year. Despite this inventory adjustment, consumer demand for ultra-premium products remained strong."
In the January-March 2025 quarter, the ultra-premium segment (>Rs 45,000) saw 15 per cent year-on-year growth, while the average selling price (ASP) increased at an 11 per cent CAGR post-Covid, highlighting a shift toward premium devices.
"This continued premiumization trend was further supported by growing affordability and expanding financing options, which made high-end devices accessible to a broader consumer base," Singh said. Singh added, "However, despite low inflation and government efforts to push spending, consumer sentiment remained cautious, especially in the budget segment."
5G smartphones captured a record-high share of 87 per cent in total shipments in Q1 2025. Remarkably, the sub-Rs 10,000 segment witnessed an exponential surge in 5G adoption, with its four-digit year-on-year growth highlighting the accelerated diffusion of 5G into the mass-market entry-level segment.
Offline channels remained strong during the quarter, accounting for 65 per cent of the overall market. Brands ramped up in-store promotions and regional outreach, especially in Tier 2 and Tier 3 cities, Counterpoint Research noted in the report. The online share was steady at 35 per cent. (ANI)