ICEA seeks cut in mobile-phone GST to 5% as entry-level demand weakens
The industry body has urged the government to reduce GST on handsets from 18% to 5%, citing a 35%-45% rise in entry-level smartphone prices, four-fold memory-cost inflation and shrinking supply below ₹10,000.
What happened
India Cellular and Electronics Association (ICEA) · ICEA has urged the government to cut mobile-phone GST from 18% to 5%, citing weak domestic demand, sharply
Key facts
- GST reduction sought: 18% to 5%
- GST raised from 12% to 18% in April 2020
- Entry-level smartphone prices increased approximately 35%-45% over the last year
- Smartphones below ₹10,000 now account for less than 5% of supply
- DRAM and NAND flash prices increased roughly four-fold since September 2025
What changed
ICEA has urged the government to cut mobile-phone GST from 18% to 5%, citing weak domestic demand, sharply higher memory costs and pressure on affordable smartphones. It says lower taxes could formalise sales, aid rural buyers and support handset manufacturing growth.
Why this matters
Prepare for sustained entry-level handset demand pressure by tightening sub-₹10,000 inventory exposure and emphasizing financing, trade-ins and value-led bundles.
What to watch
- GST Council agenda, Finance Ministry comments, or budget documents referencing handset-tax rationalization.
- Monthly India smartphone shipment data, especially sub-₹10,000 unit share and first-time buyer demand.
- NAND/DRAM spot and contract-price trends and OEM guidance on bill-of-materials inflation.
- Average selling price movement, discount intensity and inventory days at major online/offline channels.
- Changes in feature-phone shipments, refurbished-device sales and handset financing delinquency rates.