New Delhi: GST on smartphones at prices below $25,000 should be reduced to 5 per cent, while a rate of 18 per cent could be maintained on higher priced machines, according to a GT Bharat-PWIF paper released on Wednesday.
A joint report by Grant Thornton Bharat and Policy Watch has called on India to reconsider the Goods and Services Tax (GST) framework for affordable smartphones, arguing that the current GST rate of 18 per cent no longer reflects the evolving role of smartphones in India’s digital economy.
According to the study, such a differentiated tax structure would improve affordability for first-time buyers and price-sensitive consumers, while supporting the government’s goals of Digital India, financial inclusion, and electronics manufacturing.
She stressed that applying the same GST rate to an entry-level smartphone and a premium device disproportionately impacts the sector that stimulates digital inclusion.
sub $The 25,000 smartphone segment, which accounts for nearly two-thirds of India’s phone shipments, primarily caters to first-time buyers, rural households, women, students and low-income consumers, the GT Bharat-PWIF study said, adding that nearly 35 lakh crore Indians continue to use feature phones, suggesting that affordability remains a major barrier to broader digital engagement.
Arguing that smartphones should now be viewed as accessible digital infrastructure rather than discretionary consumer products, the newspaper said India imposes one of the highest indirect tax rates on smartphones among similar electronics manufacturing economies.
Countries such as Vietnam, Thailand, Indonesia and Malaysia have adopted relatively lower tax structures that support wider smartphone adoption while maintaining manufacturing competitiveness.
He added that a differentiated GST framework for affordable smartphones should be viewed not as a tax concession to the electronics industry but as a strategic policy intervention that aligns taxation with India’s digital transformation, manufacturing ambitions and long-term economic goals.
