GST Impact on Mobile Handsets in India
The Goods and Services Tax (GST) levied on mobile handsets in India is recommended to be reduced to 5%, while the volume of domestically manufactured units should decrease to 22 crores (220 million), according to an industry executive.
Pankaj Mohindroo, the president of the India Cellular & Electronics Association (Icea), emphasized the importance of lowering the GST on mobile phones to enhance affordability for consumers. He highlighted the decline in smartphone production volume to 22 crores from the current 30 crores.
Mohindroo made these remarks at an industry event hosted by The Confederation of All India Traders (CAIT), All India Mobile Retailers Association (AIMRA), and the Organised Trade Retailers (ORA). The Delhi-based lobby group represents prominent Chinese and international brands operating in India.
India is home to over 300 manufacturing units, experiencing notable growth driven by initiatives like the Production Linked Incentive (PLI) scheme and Phased Manufacturing Programme (PMP) introduced by the government.
Suggesting inspiration from China’s incentives, Mohindroo urged the Indian government to focus on stimulating demand and fostering growth. He also noted a rise in value despite challenges.
China recently rolled out a 15% subsidy on smartphones and electronics priced below 6,000 yuan, aimed at encouraging domestic consumption through device upgrades. This move has boosted smartphone sales in China, leading to a substantial increase in the first quarter of 2025 as per Counterpoint Research.
Mohindroo highlighted the significance of smartphones as a leading export, with substantial domestic production valued at ₹2 lakh crore. The exports extend beyond neighboring countries to the United States and Europe.
Addressing trade practices, Mohindroo stressed the need for improved supply chain hygiene, suggesting a controlled online sales proportion of 15% to maintain balance.
India’s vast market with 140 crore individuals emphasizes the importance of supporting local brands for the realization of Atmanirbhar Bharat (self-reliant India).
