"ICEA advocates for a 5% GST on mobile phones to bolster affordability, advance the Digital India initiative, and achieve the $500 billion vision"
The India Cellular & Electronics Association (ICEA) has made a strong push for mobile phones and their components to be classified as essential goods under the 5% Goods and Services Tax (GST) slab. This advocacy comes amidst ongoing GST reforms and a major GST overhaul initiative that has received an in-principle nod from the Prime Minister's Office.
The current 18% GST on mobile phones is seen as regressive by the ICEA, as it inhibits affordability and digital inclusion. With mobile phones becoming essential digital infrastructure for over 900 million Indians, the association argues that a lower GST rate is necessary to restore affordability, stimulate demand, and support the Prime Minister's vision of building a $500 billion electronics ecosystem while accelerating universal digital access across India.
ICEA's progress includes publicly urging the government to rationalize GST rates by moving mobile phones and components from the 18% slab to 5%, aligning with the Prime Minister's Independence Day address that highlighted GST reforms aimed at lowering rates on essential everyday items. The association has also positioned this demand within the broader industrial strategy to scale India's electronics export growth and build indigenous supply chains.
The mobile phone sector in India has grown significantly, with production increasing from Rs. 18,900 crore in FY15 to Rs. 5,45,000 crore in FY25. India has also become the second-largest mobile phone manufacturer globally. The Hon'ble Prime Minister of India has announced next-generation GST reforms, providing a potential opportunity for the ICEA's advocacy to bear fruit.
ICEA represents India's leading mobile and electronics manufacturers, and the association urges that mobile phones be treated as essential goods in the forthcoming GST reform. The push for this classification is backed by arguments centered on affordability, digital inclusion, and industrial growth. The association also emphasizes the socio-economic impact beyond just market considerations, positioning mobile phones as essential tools underpinning education, healthcare, finance, and governance.
However, detailed official announcements about the inclusion of mobile phones specifically in the 5% GST slab have not yet been made public beyond ICEA's lobbying. The GST Council is expected to discuss and decide on the matter in its upcoming meetings.
In conclusion, the ICEA has made a compelling case for mobile phones to be reclassified under the 5% GST slab as essential goods, backed by arguments centered on affordability, digital inclusion, and industrial growth. The association's advocacy is timely, given the ongoing GST reforms approved at the highest government levels and the Prime Minister's announcement of next-generation GST reforms.
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