NEW DELHI, Sept. 17 -- Smartphones, the backbone of India's electronic goods industry, are expected to take the steepest sales hit in a decade during the festive season this year, when shopping reaches its peak.

After an expected decline in laptop sales, smartphone sales are likely to fall sharply in this quarter, with high prices of memory chips making even the most affordable devices 40% more expensive. This would be the worst level of sales for India's $45 billion smartphone economy since September 2016.

The volume of smartphones sold in the July-September quarter is projected to decline 25% to about 36 million units from 48 million a year earlier, according to data collated from independent third-party market research firm Internati...