"Micromax not only toppled Nokia to clinch the second spot but also created a gap between the second and the third spot," IDC said.

IDC further said a new entry-level price point is being breached by the Indian home grown vendors every quarter. "These devices are not equipped with high end specifications and RAM is typically 256 MB. This ultra low cost segment may not sound a viable option to the repeat buyers, but it works well on the targeted segment," IDC India Senior Market Analyst Karan Thakkar said.

However, IDC believes the potential for growth in the smartphone market is still "quite high" as 71 percent of the market continues to be on feature phones. Also, the festive season ahead and continuous run rate buying from the consumer is expected to fuel growth in the smartphone segment.

"The overall India mobile phone market stood at 63.21 million units in Q2 2014 ie a 5 percent quarter on quarter growth against Q1 2014. Back to back volume growth in the smartphone market are being noted due to the re-defined low price models in smartphones and continuous migration from feature phones to smartphones," IDC said.

The share of sub-$200 smartphones (about Rs 12,000) is also increasing (81 percent in Q2 2014), it added. "With the influx of Chinese vendors and Mozilla's plans to enter the low end segment of the smartphone market will become crucial in the coming quarters," IDC said.

Also, the contribution of 'phablets' (5.5 inch - 6.99 inch screen size) in Q2 2014 comprised 5.4percent of the overall smartphone segment. It segment grew by 20 percent