In India, smartphones are no longer just a means of communication, but have become a vital part of education, online banking, government services, and digital payments. A new report has urged the government to reduce the GST on smartphones priced up to ₹25,000 from 18% to 5%. The report believes this will make it easier for millions of new users to purchase smartphones and give new impetus to the Digital India campaign.
A joint report by Grant Thornton India and Policy Watch India Foundation (PWIF) states that currently, 18% GST is applicable on all smartphones, whether entry-level devices or premium flagship models. According to the report, this system is not in line with changing needs.
It has been suggested that the GST on budget smartphones up to ₹25,000 be reduced to 5%, while the current 18% tax on more expensive smartphones could be maintained. This is likely to directly benefit consumers purchasing budget smartphones.
According to the report, nearly two-thirds of smartphones sold in India fall in the sub-₹25,000 segment. This segment is the preferred choice for first-time smartphone buyers, rural families, students, women, and low-income consumers.
The report also states that approximately 350 million people in the country still use feature phones. Therefore, lowering smartphone prices could connect a significant portion of the population to the digital world for the first time.
The report argues that smartphones should be viewed not just as consumer products, but as a digital infrastructure. The role of smartphones in accessing services such as government schemes, online education, UPI payments, telemedicine, and digital documents is steadily increasing.
If budget smartphones become affordable, the reach of digital services could expand even faster. This will also strengthen the goals of financial inclusion and digital empowerment.
The report claims that countries like Vietnam, Thailand, Indonesia, and Malaysia impose relatively lower indirect taxes on smartphones compared to India. This helps drive smartphone adoption and promote electronics manufacturing.
Experts believe that if India adopts a separate GST structure for budget smartphones, it will strengthen the domestic market and benefit the electronics industry in the long run.
At present, this is only a policy recommendation, and the government has not announced any changes to GST rates. If this proposal is approved in the future, it could provide relief to millions of budget smartphone buyers and accelerate smartphone adoption in the country.