Mobile news

Buying a smartphone? Be ready to pay more as GST hike comes into effect


Starting April 1, prices of smartphones in India would increase due to the new increased GST. Last month, Finance Minister Nirmala Sitharaman announced that the Goods and Services Tax (GST) on smartphones would be raised from 12 percent to 18 percent from April 1.

India’s top smartphone brand, Xiaomi, has already confirmed that the prices of Redmi and Mi smartphones will see a hike. Through a post on Twitter, the company has confirmed that it will be increasing the prices of its products, and the updated price list would be released soon.

“Considering a few other factors and keeping with the Xiaomi policy of making <5% margin on our hardware products, we will be increasing the prices of our products. New prices will be effective immediately,” Xiaomi said.

Realme, which is Xiaomi’s biggest competitor and one of the fastest-growing smartphone brands in India, has reportedly said that it will absorb the new GST cost and not increase the price of its upcoming Narzo series. 

Samsung, on the other hand, has increased the price of its flagship series, the Galaxy S20, by up to Rs 5,000. The vanilla Galaxy S20, which was launched for Rs 66,999, is listed on Samsung India website for Rs 70,500.

The more premium Galaxy S20 Ultra and Galaxy S20+ are now priced at Rs 97,900 and Rs 77,900, respectively. Prices of its budget smartphones, Galaxy M21 and Galaxy M31 too have been increased to Rs 14,222 and Rs 16,856, respectively.

We expect other brands to increase the prices of their smartphones as well. 

Soon after Sitharaman’s announcement, Xiaomi India VP Manu Kumar Jain said that an increase in GST will “crumble the industry”, considering that it is still recovering from supply chain disruption caused by the coronavirus outbreak. Jain tweeted to the Prime Minister urging him to exempt phones that cost less than Rs 15,000. The India Cellular and Electronics Association (ICEA) has also warned that the domestic consumption goal of $80 billion by 2025 will be missed by $25 billion. 

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