EMI Financing Crosses 50% of Smartphone Purchases in India's Tier 2 Cities

Buying a smartphone on EMI has become the norm rather than the exception in India's smaller cities, according to fresh data from Counterpoint Research. The firm's Monthly Smartphone Financing Tracker shows that equated monthly instalments accounted for 57.5 per cent of smartphone purchases in Tier 2 mainline markets during the second quarter of 2026, up sharply from 44 per cent in the same period last year — a 13 percentage point jump in just twelve months.

Financing spreads beyond the metros

The trend isn't limited to Tier 2 cities. Tier 3 and smaller markets also crossed the halfway mark for the first time, with EMI penetration rising to 55 per cent, up five percentage points year-on-year. Tier 1 markets saw more modest growth, climbing from 37 per cent to 41 per cent over the same period.

Analysts at Counterpoint attribute the acceleration in smaller cities to three main factors: the expanding reach of non-banking financial company financing into non-metro India, rising consumer aspirations to own pricier, more feature-rich devices, and a broader range of affordability schemes rolled out by both brands and retailers.

Premium brands, longer tenures

The data also reveals a clear divide in how different smartphone makers approach financing. Apple recorded the longest average financing tenure in the market at 17.2 months, reflecting the relatively high price of its devices in India. Samsung followed at 11.4 months, with Oppo, Vivo, Realme and Xiaomi ranging between roughly 8.5 and 9.9 months.

By volume of units financed, Samsung led the pack, followed by Vivo and Apple. Samsung has already rolled out a 30-month, no-cost EMI option for its latest Galaxy Z series foldables, while Apple continues to lean on bank cashback offers and no-cost EMI schemes through its retail and online stores in India.

Why the shift is happening now

The rise in financing comes even as overall smartphone volumes in India are shrinking. Shipments fell 11.1 per cent year-on-year to 33.2 million units in the April-June quarter, according to IDC, following a 4.1 per cent decline in the first quarter. For the first half of 2026 as a whole, shipments totalled 64.2 million units, down 7.9 per cent from a year earlier and the weakest first-half performance in five years — even as the overall market's value rose 3.6 per cent, underscoring how much more expensive the average device has become.

India now has 24 smartphone models priced above ₹1 lakh and more than 40 priced between ₹50,000 and ₹1 lakh, according to industry analysts, making extended EMI tenures less a convenience and more a practical necessity for many buyers. Counterpoint expects financing — spanning NBFC loans as well as credit and debit card EMI options — to account for 42 per cent of all smartphone sales in India this year, with the upcoming festive season seen as a key test of the trend.

A regulatory backdrop

The financing boom is unfolding alongside a new regulatory framework from the Reserve Bank of India governing how lenders can remotely restrict financed devices in cases of missed payments. The rules, which take effect from January 1, 2027, require a graduated process before any restriction is applied, bar lenders from blocking emergency calls or messages, and prohibit accessing personal data stored on a device for recovery purposes. Analysts say the added clarity could give lenders more confidence to extend device financing, reinforcing a shift that is already reshaping how Indians — particularly outside the metros — buy their next phone.

This article is an original editorial summary based on publicly reported information. It has been independently written for publication and does not reproduce content from any single source.