Xiaomi India MD Manu Kumar Jain said the GST increase on phones from 12% to 18% announced by Finance Minister Nirmala Sitharaman would “crumble” the industry. Earlier yesterday, GST Council hiked the GST rate on mobile phones and certain parts. “The industry is already struggling with depreciating INR and supply chain disruption due to Covid-19,” Jain said.
Further, in a separate tweet, Jain requested Prime Minister Narendra Modi and Finance Minister (FM) Nirmala Sitharam to reconsider the GST hike. He said the industry is also struggling due to the supply chain disruptions caused by the outbreak of the Covid-19 disease. “At least all devices under $200 (approximately ₹15,000) must be exempted from this,” he added.
Jain isn’t the only one opposing the government’s decision. Pankaj Mahindroo, Chairman of the Indian Cellular Association called the move “extremely detrimental to the vision of Digital India”. “Consumption will be stymied and our domestic consumption target of $80 billion (Rs. 6 lakh crore) by 2025 will not be achieved. We will fall short by at least ₹2 lakh crore. This was time for statesmanship, especially when the country is going through a crisis and as a nation, we have fallen short,” Mahindroo said in a statement to the Indian Express.
Smartphone sellers in India have been struggling to keep supplies up due to shutdowns in China caused by the novel pandemic coronavirus. While factories have reopened in China since, they are currently operating at sub-optimal levels since many workers haven’t returned to work yet.