41 mins ago
Mobile Phone Industry Seeks GST Cut Amid Demand, Memory Pressures
The mobile phone industry in India wants the government to lower the tax on phones.
It wants GST reduced from 18% to 5%.
The industry says fewer people are buying phones, especially cheaper smartphones.
Phone prices have also risen because memory chips have become much more expensive.
ICEA says this is especially difficult for rural families and people buying their first smartphone.
It believes a lower tax could make phones cheaper.
The group also says this could encourage people to buy from official sellers instead of informal markets.
ICEA has asked the finance and electronics ministers to support the proposal.
The India Cellular and Electronics Association asked the government to reduce GST on mobile phones from 18% to 5%.
ICEA said domestic handset demand has weakened as replacement cycles lengthen and affordable smartphones face pressure.
The association reported that entry-level smartphone prices rose about 35% to 45% over the past year.
DRAM and NAND flash prices have reportedly increased roughly four-fold since September 2025 amid demand from AI data centres.
ICEA said lower GST could reduce informal-market advantages, support consumers and revive domestic smartphone demand.
- Who
- The India Cellular and Electronics Association, led by chairman Pankaj Mohindroo, made the request to Finance Minister Nirmala Sitharaman and Electronics and Information Technology Minister Ashwini Vaishnaw.
- What
- ICEA requested that GST on mobile phones be reduced from 18% to 5%, along with corresponding rate rationalisation for mobile-phone components.
- Where
- The request concerns India and was made in letters to the Union government in New Delhi.
- When
- The letter to Nirmala Sitharaman was dated September 2; ICEA said memory prices have risen roughly four-fold since September 2025.
- Why
- ICEA said weaker domestic demand, higher smartphone prices and rising memory-chip costs are constraining the next phase of manufacturing growth.
Key facts
- Requested GST rate
- 5%, down from the current 18%
- Current affordable-phone supply
- Smartphones priced below Rs 10,000 account for less than 5% of supply, according to ICEA.
- Entry-level price increase
- Approximately 35% to 45% across brands over the last year
- Memory-price increase
- DRAM and NAND flash prices have risen roughly four-fold since September 2025, according to ICEA.
- Previous GST increase
- The GST rate on mobile phones rose from 12% to 18% in April 2020.
- Industry rationale
- ICEA said a lower GST rate could reduce informal-market advantages and expand formal, tax-compliant sales.
Quotes
Pankaj Mohindroo
Chairman of the India Cellular and Electronics Association
“This imbalance will constrain the next phase of manufacturing growth unless India restores momentum in its domestic market. ICEA therefore seeks the Government's intervention to reduce GST on mobile phones from 18 per cent to 5 per cent and undertake corresponding rate rationalisation for mobile-phone components”
deccanchronicle.com
“More purchases will consequently move through authorised and tax-compliant channels, broadening the formal tax base and improving transaction visibility”
deccanchronicle.com
Sources
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