Mobile phones

At a time when all major handset manufacturers are struggling to cope with disruptions caused by the coronavirus (Covid-19), the Goods and Services Tax (GST) Council has dealt a body blow to the mobile phone sector. On March 14, 2020, it proposed a hike in the GST rates on mobile phones and allied parts to 18 pc from 12 pc, which has come into effect on April 1, 2020.

The hike could compound manufacturers’ problems as factory shutdowns and production cuts in China due to Covid-19 have led to a surge in the prices of several components. The increase in customs duty on imported components announced in the Union Budget has also put severe pressure on their margins. The move has potential to dislodge plans for making India a digital economy as smartphones are set to get costlier.