The analyst firm Canalys said in a blog post that India now accounted for more than 10% of the global smartphone market, an increase from 6% five years ago.
In the final quarter of 2018, Indian shipments grew 14% to 34.1 million units, bouncing back from a quarter which had seen a small decline.
India was among the six countries in the top 20 that recorded positive full-year growth, though in terms of percentage it stood behind Indonesia (17%), Russia (14.1%) and Italy (10%). But India was the lone country to show growth for the last three years.
Canalys research manager Rushabh Doshi said 2018 had been a defining year for the smartphone market in India.
"The impact of a declining Chinese market on vendors such as OPPO, vivo and Xiaomi was pronounced, with OPPO and vivo reducing both their above- and below-the-line marketing efforts significantly to counter falls in their Chinese businesses," he said.
"Xiaomi, on the other hand, focused heavily on India, with excellent results. India is now the biggest market for Xiaomi worldwide. The Chinese vendors have done well to ride the spread of 4G and the boom in local apps and services.
"[The year] 2018 was undoubtedly the year app-based economies flourished."
In the final quarter of 2018, Xiaomi shipped 9.4 million smartphones to China, and 10.0 million to India.
Doshi said 2019 would be more disruptive than 2018.
"Since 1 February, the Indian Government has restricted online marketplaces, such as Amazon and Flipkart, from selling devices exclusively on their platforms. It has also banned online marketplaces from having equity stakes in seller accounts," he said.
"The FDI (foreign direct investment) policies are going to slow market development spending by these platforms, thereby denting overall online smartphone sales. There will be a see-saw shift toward offline channels this year, and many vendors will start engaging with distributors or offline retailers in a bid to protect their growth ambitions."
Doshi added that while operations at Amazon and Flipkart were likely to stabilise in six months, uncertainty over future regulation would weigh heavily against these platforms.
"On the bright side, the raising of the income tax ceiling from INR2.5 lakh (Rs 250,000 or A$4935) to INR5.0 lakh (Rs 500,000 or A$9872) will imply a higher net pay, and a slightly higher disposable income. This is definitely good news for vendors looking to raise prices without sacrificing their addressable markets," he said.
Graphics: courtesy Canalys