India's smartphone market is experiencing a dynamic shift, fueled by increasing local manufacturing, rising consumer demand for premium features, and the growing popularity of refurbished devices. While the market has shown modest growth overall, the re-commerce sector is poised for significant expansion, presenting both opportunities and challenges for the industry. A key factor in unlocking the full potential of India's renewed phone evolution lies in effectively tackling the "drawer economy" – the large number of unused phones languishing in consumers' drawers.

The Rise of Refurbished Smartphones

The Indian smartphone re-commerce sector is projected to reach a staggering $219 billion by 2033, according to Cashify's latest User Behaviour Survey 2025 and Whitepaper. This growth is driven by several factors, including the increasing affordability of refurbished devices, the desire for premium features at a lower price point, and a growing awareness of environmental sustainability. Refurbished smartphones, which are pre-owned devices that have undergone a series of checks, repairs, and part replacements, offer a viable alternative to buying new. These devices often come with a new battery and are sold with warranties, providing consumers with added assurance. Data indicates a rising trend, with retail platforms positioning themselves to capitalize on it. Research by Redseer estimates India's used smartphone market will be worth $10 billion by the end of 2026.

Tackling the "Drawer Economy"

Despite the promising growth of the refurbished smartphone market, its progress is hampered by the "untapped drawer economy," where consumers hold on to their old, unused phones. Mandeep Manocha, co-founder and CEO of Cashify, emphasizes that unlocking this dormant supply is crucial for further expansion. Several strategies can be employed to address this challenge:

• Incentivizing trade-ins: Offering attractive trade-in values for old phones can encourage consumers to upgrade to newer models or refurbished devices.
• Raising awareness: Educating consumers about the environmental and economic benefits of selling or recycling their old phones can motivate them to participate in the re-commerce ecosystem.
• Simplifying the selling process: Making it easier for consumers to sell their old phones through online platforms, retail stores, or exchange programs can increase participation.
• Ensuring data security: Addressing concerns about data privacy by providing secure data wiping services can encourage consumers to sell their old phones without fear of their personal information being compromised.

India's Growing Smartphone Market

India's smartphone market has witnessed a rebound in 2025, with a 7.3% year-over-year growth in the second quarter. According to the International Data Corporation (IDC), smartphone shipments reached 70 million units in the first half of 2025, a 0.9% increase compared to the same period last year. While the market is recovering from a previous slump, subdued consumer demand and rising average selling prices (ASPs) are expected to limit the pace of annual recovery. The average selling price (ASP) is at a record high of $275.

Several key trends are shaping the Indian smartphone market:

• Premiumization: Consumers are increasingly opting for premium smartphones with advanced features, driving growth in the mid-premium (US$400600) and super-premium (US$800+) segments. The premium segment above ₹50,000 (US$600) was the strongest driver, with shipments nearly doubling.
• 5G Adoption: The adoption of 5G technology is rapidly increasing, with 5G smartphone shipments accounting for 82% of total shipments last year, a remarkable 49% year-over-year growth.
• Make in India: India has become the second-largest mobile phone manufacturer globally, with over 300 manufacturing facilities. The government's Production Linked Incentive (PLI) scheme has played a crucial role in attracting global players and boosting local production.
• Offline Growth: Smaller cities are fueling an offline sales boom, with offline channels accounting for over 70% of sales in many tier-3 and tier-4 cities.

Challenges and Opportunities

While India's smartphone market presents significant opportunities, several challenges need to be addressed:

• Subdued Demand: Weak consumer demand, particularly in the budget segment, is hindering overall market growth.
• Rising ASPs: Increasing average selling prices are making smartphones less affordable for budget-conscious consumers.
• Intense Competition: The mid-range smartphone market is oversaturated with new model launches, leading to intense competition and potential inventory issues.

To overcome these challenges and capitalize on the opportunities, brands and channel partners should focus on:

• Driving fresh shipments: Prioritizing new shipments over relying on promotions to clear old stock.
• Strengthening offline presence: Expanding reach in tier-3 and tier-4 cities through in-store promotions and regional outreach.
• Catering to diverse consumer needs: Offering a wide range of smartphones across different price points and feature sets to cater to a diverse consumer base.

By addressing the "drawer economy," leveraging the growth of the refurbished smartphone market, and adapting to evolving consumer preferences, India can unlock the full potential of its $219 billion renewed phone evolution.