India electronics body urges GST cut on mobile phones to 5%

The India Cellular and Electronics Association (ICEA) has urged the Indian government to reduce the Goods and Services Tax (GST) on mobile phones from 18 per cent to 5 per cent. The industry body, which represents major manufacturers including Apple, Samsung, Xiaomi, Oppo, and Vivo, has requested that Finance Minister Nirmala Sitharaman present this proposal to the next GST Council meeting.

The association argues that the tax cut is necessary to address affordability barriers for approximately 250 million Indians currently using feature phones. High component costs, particularly a fourfold surge in global mobile DRAM and NAND flash memory prices driven by AI data center demand, have increased the cost of entry-level devices by 35 per cent to 45 per cent over the last year.

While India has become the world's second-largest mobile phone manufacturer by volume, with production reaching ₹6.27 lakh crore in FY26, domestic demand has weakened. ICEA warns that smartphones priced under ₹10,000 now represent less than 5 per cent of market supply, and shipments could drop by 8 per cent to 15 per cent in 2026 if affordability is not addressed.