Mumbai: If you are planning to buy a new smartphone, waiting a little longer could potentially save you money. The government may consider reducing GST on mobile handsets from the current 18% to 5%, a move that could bring down smartphone prices significantly.
However, the potential tax cut is not just about cheaper phones. It could also help revive slowing smartphone demand and support India’s growing mobile manufacturing industry.
Why is India’s smartphone market slowing?
India’s smartphone market is facing pressure. According to Counterpoint Research and IDC data, smartphone shipments fell around 10-11% between April and June 2026, marking one of the sharpest quarterly declines in nearly six years.
Manufacturers are also facing rising production costs, particularly for critical components such as chips and memory. This has increased pressure on margins at a time when consumer demand is already weakening.
Why reduce GST from 18% to 5%?
Mobile handset manufacturers want the government to reduce GST from 18% to 5%. A lower tax rate could give companies room to cut retail prices, making smartphones more affordable and potentially boosting demand.
The move could also support India’s mobile manufacturing ambitions.
Government data shows mobile phone production reached around ₹6.27 lakh crore in FY26, accounting for nearly half of India’s total electronics production of ₹13.11 lakh crore.
How much could you save?
Consider a smartphone currently priced at ₹1 lakh, including 18% GST. If GST falls to 5% and the entire tax benefit is passed on, its price could decline to around ₹89,000.
That translates into savings of roughly ₹11,000.
How much cheaper could iPhones get?
Applying the same calculation, an iPhone 17 priced at ₹82,900 could fall to around ₹73,800, saving buyers roughly ₹9,100.
The ₹1,19,900 iPhone Air could become cheaper by around ₹13,000, while the ₹1,34,900 iPhone 17 Pro could see savings of nearly ₹15,000.
On a ₹2,29,900 2TB model, the potential saving could approach ₹25,000.
These are only theoretical estimates, not confirmed prices. Actual reductions will depend on how much of the GST benefit manufacturers pass on to customers.
No final decision on reducing GST to 5% has been announced yet. More clarity could emerge around the GST Council meeting scheduled for October 7.
