Indian mobile makers ask government to cut GST to 5% as demand wanes

In a September 2 letter, the India Cellular and Electronics Association (ICEA) urged Finance Minister Nirmala Sitharaman and Union Electronics and IT Minister Ashwini Vaishnaw to reduce the goods-and-services tax on mobile handsets from one outlet 18 % to 5 %. ICEA argues that domestic demand has lagged behind India’s rapid ascent to become the world’s second-largest phone maker by volume and the nation’s leading export product in FY 2025-26.

Consumers are purchasing fewer devices, replacement cycles are extending, and the affordable-smartphone segment is under strain, with entry-level prices up 35-45 % and sub-₹10,000 models now representing less than 5 % of supply. The association also points to a four-fold increase in DRAM and NAND flash prices since September 2025, driven by AI data-centre demand, which disproportionately affects rural households and first-time buyers. ICEA says a lower GST would narrow the price advantage of grey-market sellers, shift sales to formal channels, and support the next phase of mobile-phone and component manufacturing in India.