The mobile phone industry anticipates significant policy measures to drive growth and innovation in the sector. The Indian smartphone market is projected to reach $37 billion by 2025, growing at a compound annual growth rate (CAGR) of 10.5% from 2021 to 2025 (source: Statista). To sustain this momentum, we at Blackzone Mobiles hope for a reduction in GST on mobile phones from the current 18% to 12%, which would make smartphones more affordable for the masses and accelerate digital penetration across the country.
The feature phone market, which continues to play a crucial role in bridging the digital divide, is also growing steadily. In 2022, India shipped over 74 million feature phones, underscoring their importance in the overall mobile phone ecosystem (source: Counterpoint Research). We expect similar tax relief for feature phones, as reducing the GST on these devices would benefit a significant portion of the population that relies on them for communication and basic internet access.
Additionally, the government’s focus on the ‘Make in India’ initiative has been commendable. In 2022-2023, mobile phone exports surged to $5.5 billion, a 75% increase from the previous year (source: ICEA). To further boost domestic manufacturing and exports, we expect enhanced incentives and subsidies for local manufacturers. This includes increasing the allocation for the Production Linked Incentive (PLI) scheme, which has already shown positive results by attracting significant investments and creating job opportunities.
Furthermore, offering tax incentives for R&D investments can foster innovation and position India as a global leader in mobile technology. By supporting both smartphone and feature phone segments, the government can ensure inclusive growth, bridging the digital divide, and promoting economic development.
