New entrants from the consumer electronics industry are also eyeing the sub-Rs 15,000 segment. The opening, however, comes in a shrinking market where consumers are delaying purchases and established rivals retain enormous advantages in technology and distribution. The challenge before India's homegrown smartphone makers is whether a cost-driven opportunity can become a lasting competitive advantage.
Also Read: Chinese smartphone brands lose India market share as chip costs soar
A rare opening at the bottom of the market
Chinese brands accounted for 67-68% of India's smartphone shipments in the July-September quarter, according to research firms Omdia, cited in an ET report. Omdia put their share at 68%, down from 71% in the preceding quarter and 75% a year earlier. Counterpoint estimated it at 67%, the lowest since the first quarter of 2019.The immediate trigger is the surge in memory chip prices. Memory components can account for around 40% of the bill of materials of a budget smartphone, leaving manufacturers with little room to absorb cost increases. Chinese companies, which built their Indian businesses on affordable devices offering competitive specifications, are particularly exposed.
Also Read: India smartphone shipments fall to decadal low as prices squeeze demand
Vivo, Oppo and Xiaomi have responded by trimming entry-level models, reducing the number of devices in cheaper price bands and cutting specifications to manage costs. They are also prioritising mid-range and premium handsets, where margins are better. That leaves price-sensitive buyers with fewer attractive options at a time when they are reluctant to spend more.
Indian brands are moving into this gap rather than abandoning their product line-ups. Counterpoint estimates their combined market share rose to 7% in the September quarter from 2% a year earlier, the highest since the December quarter of 2018. Lava and Ai+ accounted for almost 95% of the contribution from Indian brands, according to Counterpoint research director Tarun Pathak.
The gains are significant but need context. India's smartphone shipments fell 20-26% year-on-year to 35.8 million units in the quarter, a decade low, as rising costs prompted consumers to postpone upgrades. So, Indian brands are surely gaining share but in a depressed market. They are not riding a broad-based spending boom.
Ai+ and Lava are testing the market
Ai+, launched in July 2025, has emerged as one of the clearest beneficiaries. Founder and chief executive Madhav Sheth has told ET that the company had sold as many handsets in the current quarter as it did during the whole of the previous year. Its devices are priced between Rs 10,000 and Rs 25,000. Omdia's latest estimates point to more than fourfold year-on-year shipment growth in the September quarter.Lava, meanwhile, is trying to compete on affordability without relying only on low prices. Its entry-level 5G smartphone, initially priced at Rs 7,999, has risen to Rs 14,499 amid component cost pressures. The company says it is refining component choices, optimising software and sourcing strategically to manage costs. It has reported that sales more than doubled in the current fiscal year.
The price increase illustrates the difficulty facing domestic brands. Higher memory costs are not an advantage in themselves. They create an opening only if Indian companies can maintain an acceptable combination of price, performance and reliability while larger rivals retreat.
Other consumer electronics companies are preparing to test the same proposition. Mivi and Boltt entered the sub-Rs 15,000 smartphone segment through Flipkart in the September quarter. Noise and boAt have been exploring a possible entry, while Karbonn is planning a festive-season relaunch and Micromax is evaluating a return to smartphones. These moves could widen consumer choice, although discussions and plans should not be mistaken for established businesses.
Why this opportunity is different from the last one
Indian brands once held roughly 35% of the domestic handset market around 2015, with Micromax, Lava, Intex and Karbonn competing against Samsung. Their subsequent decline was driven by more than aggressive Chinese pricing.Xiaomi, Vivo, Oppo and Realme combined large-scale procurement with rapid product launches, heavy marketing and extensive retail distribution. They steadily improved the hardware and software consumers received for their money. Indian companies struggled to match the pace of product development and build the scale needed to spread research and development costs across millions of devices. Their combined share eventually fell below 1% in the early 2020s.
The backdrop has changed since then. India is now the world's second-largest mobile phone manufacturing base by volume, with domestic production serving both local and international brands. Mobile phone production was at Rs 6.27 lakh crore in 2025-26, up from Rs 18,000 crore in 2014-15. Exports reached around Rs 2.59 lakh crore, compared with approximately Rs 1,500 crore a decade earlier.
The expansion, driven in part by production-linked incentives, has brought factories, suppliers and manufacturing expertise into the country. Contract manufacturers such as Dixon Technologies already produce phones for international brands. This ecosystem gives Indian companies a stronger industrial foundation than their predecessors had, even if it does not automatically provide them with competitive products or consumer loyalty.
The push to build an Indian champion
The government's Rs 62,500 crore Mobile Phone Manufacturing Scheme, announced in August, seeks to address the gap between making smartphones in India and owning the brands and technology behind them.Under the scheme's brand-focused segment, eligible Indian companies can receive a 5% incentive on qualifying sales, an additional 3% for Indian design and research and development, and up to 1.5% for domestic sourcing of key components and sub-assemblies. The programme runs from FY2026-27 to FY2030-31.
Its eligibility conditions are designed to distinguish Indian-owned brands from companies that merely manufacture locally. Eligible businesses must meet requirements covering Indian ownership, management control, intellectual property, trademarks and in-house design and R&D capabilities.
India's manufacturing expansion has benefited foreign brands, including Apple and Samsung, as well as Chinese smartphone makers. The next policy challenge is to ensure that Indian companies capture more of the value created through product design, software, patents and brand ownership.
Lava is an obvious candidate to benefit. It has survived the previous shakeout and is investing beyond assembly, with plans to put around Rs 1,100 crore over five years into display modules, camera modules, printed circuit boards and enclosures. Micromax's manufacturing arm, Bhagwati Products, also remains part of the wider ecosystem through plans for new facilities in Greater Noida with Chinese original design manufacturer Huaqin.
Winning customers will be harder than winning market share
The biggest risk is that the current gains prove temporary. Omdia estimates smaller domestic brands are shipping only around 300,000-500,000 units per quarter. Moving beyond that scale will require reliable inventory, broad distribution, efficient retail economics and after-sales service that consumers can trust.An online-first strategy, adopted by several newcomers, can help keep costs down. But smartphones remain products in which buyers care about durability, camera performance, software updates and service availability. A low price may secure a first purchase without ensuring the next one.
The scheme's R&D incentives could therefore prove more consequential than the immediate sales subsidy. Indian brands need to develop better industrial design, camera processing, software and component integration, while improving quality control. They also need dependable access to components when global supply conditions tighten.
The opportunity is real, but Chinese brands are not disappearing. Their lower market share partly reflects temporary cost pressures, and they could regain ground if memory prices ease or they adjust their product strategies. Samsung and Apple, meanwhile, are benefiting from stronger premium positioning, underlining how difficult it is to compete without a clear product proposition.
India has built much of the manufacturing base needed to support a homegrown smartphone champion. The next challenge is whether Lava, Ai+ or a new entrant can turn that advantage into products consumers repeatedly choose. A brief retreat by Chinese competitors can create space in the market but only technology, distribution and customer trust can keep it open.
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