Mobile retailers flag weak demand amid rising smartphone prices: AIMRA–Techarc study

A nationwide survey by AIMRA and Techarc highlights slowing handset sales, mounting pressure on mass-market smartphone demand and growing retailer concerns over business sustainability, prompting calls for GST relief and industry support ahead of the festive season.

India's mobile phone retail sector is witnessing mounting pressure as rising memory and component costs push smartphone prices higher, resulting in weaker sales volumes despite relatively stable revenue, according to a new nationwide study released by the All India Mobile Retailers Association (AIMRA) in collaboration with research firm Techarc.

Titled Retailer Pulse 2026, the study is based on 1,126 verified responses from mobile phone retailers across 22 States and Union Territories, making it one of the largest surveys conducted by AIMRA to assess the health of India's mobile retail market. The report concludes that while higher device prices have helped sustain turnover for many retailers, the actual number of smartphones being sold has declined significantly.

The findings show that 61.3% of retailers reported lower handset sales during the first half of 2026 compared with the same period last year. In contrast, only 39.3% experienced a decline in revenue, while 43.7% reported higher turnover, indicating that increased selling prices have partly offset falling sales volumes.

Retailers brace for challenging festive season

The survey paints a cautious outlook for the remainder of the year, particularly ahead of the festive shopping season, which traditionally accounts for a significant share of annual smartphone sales.

Nearly half (49%) of the respondents said business conditions had deteriorated during the first six months of 2026, while only 21.6% reported business growth. Looking ahead, 50% of retailers expressed concern about the July-December festive period compared with last year, and 47.4% expect sales to decline further. Only 26.6% remain optimistic about the second half of the year.

The study also indicates that affordability challenges are becoming more pronounced in the ₹10,001-₹30,000 smartphone segment, where demand is expected to remain under the greatest pressure. Around 80.9% of respondents believe the base and mid-range categories will be the most affected as consumers delay purchases or opt for lower-priced alternatives.

Smaller retailers appear particularly vulnerable. According to the report, 14% of respondents fear they may not be able to continue operations through December 2026, while another 34.1% remain uncertain about the future of their businesses.

Industry seeks policy intervention

The survey also highlights the industry's expectations from policymakers and smartphone brands. More than half (53%) of retailers identified a reduction in the Goods and Services Tax (GST) on smartphones as their top priority, ahead of lower import duties on memory and electronic components. Retailers also urged device manufacturers to absorb part of the rising input costs and expand no-cost EMI and financing schemes to improve affordability.

“For years, AIMRA has spoken about the prosperity and welfare of mobile retail in India from instinct and lived experience. With Retailer Pulse 2026, for the first time, we are able to speak with data — gathered directly from over a thousand of our members across every region of the country. This report confirms what many of us have felt at the counter through the first half of 2026. Rising memory and component costs are pushing phone prices beyond what our customers can afford. The Government and the Industry is urged to consider our recommendations for necessary interventions to rejuvenate the sentiment ahead of the festive period,” said Kailash Lakhyani, Founding Chairman, All India Mobile Retailers Association (AIMRA).

“The findings reveal a grim situation in the mobile retail fraternity and it could compound further if the necessary interventions as suggested by the data are not collectively acted upon. The ramifications would not only affect the industry but have macroeconomic challenges leading to potential closure of marginal traders,” said Faisal Kawoosa, Chief Analyst & Co-founder, Techarc.

The findings underscore the growing challenges facing India's mobile retail ecosystem, with affordability pressures, slowing consumer demand and rising operational risks emerging as key concerns for retailers ahead of the critical festive sales period.