India's mobile phone manufacturers are collectively urging the government to reduce the Goods and Services Tax (GST) on handsets from the current 18% to 5-8%, citing a dip in demand and rising memory chip prices. This move aims to boost domestic sales and manufacturing.
18%
Current Mobile GST
⏳ Time Machine
How today’s news fits into the bigger picture
July 2017
GST Implemented in India
The Goods and Services Tax (GST) was rolled out across India, replacing multiple indirect taxes. Mobile phones initially fell into a lower tax bracket.
March 2020
GST on Mobiles Increased to 18%
The GST Council decided to increase the tax rate on mobile phones from 12% to 18%, citing inverted duty structure and revenue considerations.
2022-2023
'Make in India' Boosts Production
Through initiatives and PLI schemes, India significantly ramped up domestic mobile phone manufacturing, attracting major global brands and becoming the second-largest producer.
FY 2025-26
Mobiles Become Top Export
Mobile phones emerged as India's largest export product, showcasing the success of the ecosystem.
Today
Mobile phone makers requested a GST cut from 18% to 5-8% due to falling demand and rising chip costs.
What happens next?
The government will consider the proposal, potentially leading to lower mobile phone prices and boosted sales if approved.
Mobile phone manufacturers in India, represented by the India Cellular and Electronics Association (ICEA), have called on the government to cut the Goods and Services Tax (GST) on mobile handsets from the current 18% to a range of 5-8%. The industry argues that this reduction is essential to counter declining demand and rising global memory chip prices, which are impacting profitability. India has become the world's second-largest mobile phone manufacturer by volume and its largest export product in FY 2025-26, highlighting the sector's economic importance. A GST cut could make phones more affordable, stimulating sales and supporting the 'Make in India' initiative.
💭 If you're wondering…
The India Cellular and Electronics Association (ICEA) is an industry body that represents mobile phone and electronics manufacturers in India, advocating for policies that support the growth of the sector.
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