Explained: Memory chip crisis will ruin the common man's budget! TVs, mobiles, and laptops could become more expensive

When the new GST rates were implemented in September 2025, the government reduced the tax on televisions from 28% to 18%. However, no changes were made to the GST rates on smartphones and laptops, as these two gadgets were already in the 18% slab. 

There were also speculations that the GST on laptops and smartphones might be increased. This means that the common man was given significant relief on gadgets under the GST reform.

Now, it appears that this relief will end in the next two to three months. A memory chip crisis has emerged not only in India but globally. This is causing a reduction in the production of gadgets. Consequently, memory chip prices are rising. These prices may see further increases in the coming days.

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ET's report states that smartphone, television, and laptop prices are expected to increase in the next two to three months. These increases could range from 4 to 8 percent. 

Notably, gadget prices already increased by more than 21 percent in the last two months of last year, November and December, even as demand for them typically declines after the festive season. Let us explain this in detail.

Gadgets can be expensive

According to industry executives and market experts, prices of smartphones, televisions and laptops are expected to rise by 4-8 per cent in the next two months, in addition to the sharp increase of up to 21 per cent seen in November-December.

Smartphone makers are facing the impact of rising demand for memory chips due to the rapidly expanding use of AI and high-performance computing, leading to rising prices. Worse, industry officials predict that such price hikes could become commonplace every quarter or even every month this calendar year.

Companies increased the prices of phones

Market analyst Counterpoint Research said the memory market has entered a "hyper-bullish" phase, where after a 50 per cent price increase last quarter, it will rise another 40-50 per cent this quarter, and another 20 per cent in April-June.

Tarun Pathak, research director at Counterpoint Research, said some smartphone brands like Vivo and Nothing have increased prices by Rs 3,000-5,000 in January, while others like Samsung are making indirect efforts like cutting cashbacks and discounts.

He said that memory prices are likely to continue rising in 2026 and next year. While brands will factor this into sales of new products, prices may also come down due to reductions in some components, such as displays.

Television will also become expensive

Phone makers said the supply of memory chips has become a challenge. For example, Super Plastronics, which sells televisions under the Kodak, Thomson, and Blaupunkt brands, is currently only able to fulfill about a tenth of its memory chip orders.

"We increased prices by 7% in November, are now increasing them by 10% this month, and plan another 4% increase in February," Super Plastronics CEO Avneet Singh Marwah said in an ET report. In fact, the upcoming Republic Day sale will have the lowest discounts.

Retail chains said laptop prices have already risen by 5-8 percent, and major television brands have hinted at price hikes imminent. Pulkit Baid, director at Great Eastern Retail, said in an ET report that this price hike will immediately impact demand.

The market is expected to fall sharply

According to the All India Mobile Retailers Association (AIMRA), an organization of mobile phone retailers, smartphone prices increased by 3-21 percent in November-December. 

The organization, which represents more than 150,000 stores, said that based on signals from brands, overall prices could increase by up to 30 percent in the coming months.

AIMRA President Kailash Lakhiani said in an ET report that this sudden price increase is expected to cause a significant market decline, with shipment volumes projected to decline by 10-12 percent in 2026. 

He further added that the sub-₹20,000 segment, India's largest sales segment, will be the most affected. Consumers are already waiting for the situation to improve.

The impact of the rupee's weakness

Counterpoint also said that smartphone sales in India could see a sharper decline than the projected 2% in 2026 due to rising memory chip prices and the resulting increase in handset prices. 

The weakening of the rupee against the US dollar has also proved a double blow for companies. 

According to Counterpoint, 4GB RDIMM prices increased from $255 in the September quarter of 2025 to $450 in the December quarter, and could potentially reach $700 by March 2026.

Relief was provided by GST reform

In September, as part of the GST reform, the government reduced the rate on TVs from 28% to 18% to reduce their prices. Meanwhile, smartphones and laptops were already under the 18% tax bracket, providing significant relief to the public. 

However, due to rising prices, the benefits of the GST rate cut are now diminishing. Reports suggest that further price increases are expected in the coming days, potentially increasing the burden on ordinary people's pockets. This could also lead to an increase in overall inflation in the country.

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