Will Mobile prices increase in india this year?

In this article, I will explain about how Mobile phone prices will increase in India this year. Let's talk a little bit off-topic. This article is not technical but you will get a brief idea about the reasons why smartphone prices will hike this year.


Will Mobile prices increase in india this year?


Will the smartphone price increase & why?

 

Let's talk about the mid-range smartphones and why do I feel as of now in the current market, the pricing of most of the smartphones mid-range as well as some of the higher-end smartphones will increase in India.


Let's discuss it there are quite a few of you have been wondering about this well after the virus situation, or once lockdown is lifted well what will be the pricing of mid-range smartphones and how will it be affected will they get more affordable or they'll get expensive?


This year many of the mobile phones even in the mid-range will get a lot more expensive. Last year was great in fact I would say till March of this year we saw some great phones at a great price point with better specifications now the prices of these phones will increase. Let's discuss what is happening behind the scenes and why I feel most of the new smartphones surprising won't be as aggressive as it was earlier and we got to get used to it.


In fact, if we look at the things from where all this started the first thing I think so you already know about it that is because of the GST Indian government earlier used to levy about 12% GST on mobile phones that have been increased blanket rise to 18% so straight away 6% hit we are taking and the second thing is that if you look at the dollar now the dollar is hovering about 76 now earlier it was hovering about 69 to 70 rupees. 


This is actually very important because most of the components are actually for the smartphones are imported from other countries and actually, we pay in dollars and because of the higher price these component prices also actually increase and if you look at the dollar price, let's say even from 69 to about 76 that's a price increase of about 4 to 5 percent so if you add that what do you say 6 percent that is just GST and that four or five percent you are already seeing a price increase of about ten to eleven percent but it just doesn't stop here. 


It's really bad for offline smartphones market it will increase further for example if we take into account let's say older smartphone was priced at about Rs. 8500/- now because of all this extra GST the dollar has increased, etc let's say the price has increased to about ten thousand, let's talk about the first scenario originally it was at Rs. 8500/- and if you are aware of it that none of the dealer or whatever shopkeeper sells these smartphones for free. So there is always a commission that these smartphone manufactures have to give to all dealers etc. for sales.  


Let me explain it in a very easy way, let's make it five percent commission so if you look at it, as the original price was about eight thousand five hundred at five percent if I recall it to be four hundred which smartphone manufacturer will be paying to that dealer now because of the extra GST the dollar and all those things let's say the price is increased to ten thousand still they have to give that dealer that five percent now the commission will be 500 rupees. So as you can see 75 rupees already increased and more simplifying things generally in the offline market it's just not one-percent dealer there is distributor there is also warehouse expenses everything is dependent upon an increase in the cost of smartphones in the offline market. 


I would say the price would certainly increase a lot more than online and this is the main reason that we are seeing that the new smartphone started launching are not priced as aggressively asked earlier ones we are seeing anywhere increase of ten to twelve percent and some vendors have you increased about eighteen percent. I feel that 18 percent is on the higher side. 

 

So, will mobile prices decrease in India?


If you are expecting that smartphones will become cheaper as of now that's not the case it's the double whammy we are getting reason behind this hike is:

> Because of the GST.

> Because of the dollar price.


At last, because of the pandemic situation, the supply chain of components has been restricted, and hence that there is also a lot of shortage in smartphone supplies. Many of us have complained that many of the popular smartphones are simply not available in the market neither online or offline. The stocks are going off and even in the offline market it's not available and that is because of the inventory issues these manufacturers are simply not able to produce a lot of phones because of the pandemic situation and the logistic issues that are happening and sadly because of these reasons we don't expect new smartphones that will be launching any time right now will be priced very aggressively. 


If you think that It will be the case you might be disappointed and I think so as of now we will have to live with it I seriously hope Indian government should do something on this GST matter, government have increased it from 12 to 18 percent yes its fine but increase it for smartphones above a certain price point let's say 20% to 25% and I think the government should lower it for mid-range to budget range phones. If they do that it will be a lot helpful but we don't know if the government of India will do that or not and again we also have to wait because of this pandemic situation when the dollar comes back to about 70 rupees right now it's holding about 76.


So I hope this article makes sense because many people want to know about what would be the trend of smartphone pricing in India. As of now, the trend is that the price of them will be increased compared to what we were expecting compared to last year about the market conditions and the underlying things do let me know if you are interested in reading these kinds of articles.

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