OEMs are raising prices of smartphones in India following a tax increase
India is one of the most competitive markets for smartphone brands. Before the COVID-19 pandemic took its toll on commercial activities, India was the only positively growing smartphone market in the world. The sheer number of smartphone users (about 400 million) and the huge potential to onboard a larger number of new users has drawn several brands to target India specifically. As a result, smartphones are sold at very lucrative prices with thin margins, especially by brands like Xiaomi and Realme. But as all good things come to an end, this glorious period of tempting smartphone deals in India might become less attractive following the 50% hike Goods and Service Tax (GST) hike that is effective starting today i.e. April 1st, 2020.
Last month, India’s Finance Minister, Nirmala Sitharaman, announced an increase in the GST rate on mobile phones and specified parts. As compared to the previous rate of 12% GST, the new applicable rate is 18% – i.e. a sharp 50% increase. The announcement comes in spite of the depreciating value of the Indian Rupee against the US Dollar, extensive competition, and already slim margins.
Mi fans, #GST on mobile phones has increased by 50% from 12% to 18%.
After much deliberation & in keeping with #Xiaomi policy of maintaining <5% margin on our hardware products,we will be increasing prices of our products.
New prices will be effective immediately. Thank you!
pic.twitter.com/mdTqKdXm3r
— Manu Kumar Jain (@manukumarjain) March 31, 2020
As a result of this hike, smartphone makers are left with no alternative but to increase the prices of smartphones and accessories. Xiaomi, India’s largest smartphone seller, has already confirmed its intention to increase the prices of the phone citing the increase in GST rate and the poor performance of the Rupee. In an open letter to its patrons, Xiaomi announced that it will be increasing its prices.
Xiaomi’s spin-off brand POCO has also announced an increase of ₹1,000 (~$15) in all variants of the POCO X2 (review). In the meantime, while OPPO and Vivo didn’t announce a price hike formally, offline retailer Mahesh Telecom shared details about the increased prices of some of the top-selling models.
Likewise, Realme has also increased the prices of its phones.
While we are still awaiting details on the exact price hikes by companies, we have collated a list of smartphones with increased prices.
Old vs New Smartphone Prices in India after GST hike
| Brand | Model | Old Price with 12% GST | New Price with 18% GST |
|---|---|---|---|
| Xiaomi | Redmi K20 Pro 6GB/128GB | ₹24,999 | ₹26,999 |
| Redmi K20 Pro 8GB/256GB | ₹27,999 | ₹29,999 | |
| Redmi K20 6/64GB | ₹19,999 | ₹21,999 | |
| Redmi K20 6GB/128GB | ₹22,999 | ₹24,299 | |
| Redmi Note 7 Pro 4GB/64GB | ₹9,999 | ₹10,999 | |
| Redmi Note 7 Pro 6GB/64GB | ₹10,999 | ₹12,999 | |
| Redmi Note 7 Pro 6GB/128GB | ₹11,999 | ₹13,999 | |
| Redmi Note 7S 3GB/32GB | ₹8,999 | ₹9,999 | |
| Redmi Note 7S 4GB/64GB | ₹9,999 | ₹11,999 | |
| Redmi 8 4GB/64GB | ₹8,199 | ₹8,999 | |
| Redmi 8A 2GB/32GB | ₹6,499 | ₹6,999 | |
| Redmi 8A 3GB/32GB | ₹6,999 | ₹7,499 | |
| POCO | POCO X2 6GB/64GB | ₹15,999 | ₹16,999 |
| POCO X2 6GB/128GB | ₹16,999 | ₹17,999 | |
| POCO X2 8GB/256GB | ₹19,999 | ₹20,999 | |
| Realme | Realme X50 Pro 6GB/128GB | ₹37,999 | ₹39,999 |
| Realme X50 Pro 8GB/128GB | ₹39,999 | ₹41,999 | |
| Realme X50 Pro 12GB/256GB | ₹44,999 | ₹47,999 | |
| Realme X2 Pro 6GB/64GB | ₹27,999 | ₹29,999 | |
| Realme X2 Pro 8GB/128GB | ₹29,999 | ₹31,999 | |
| Realme X2 Pro 12GB/256GB | ₹33,999 | ₹35,999 | |
| Realme X2 4GB/64GB | ₹16,999 | ₹17,999 | |
| Realme X2 6GB/128GB | ₹18,999 | ₹19,999 | |
| Realme X2 8GB/128GB | ₹19,999 | ₹20,999 | |
| Realme X 4GB/128GB | ₹16,999 | ₹17,999 | |
| Realme X 8GB/128GB | ₹19,999 | ₹20,999 | |
| Realme 6 Pro 6GB/64GB | ₹16,999 | ₹17,999 | |
| Realme 6 Pro 6GB/128GB | ₹17,999 | ₹18,999 | |
| Realme 6 Pro 8GB/128GB | ₹18,999 | ₹19,999 | |
| Realme XT 4GB/64GB | ₹15,999 | ₹16,999 | |
| Realme XT 8GB/128GB | ₹18,999 | ₹19,999 | |
| Realme 6 4GB/64GB | ₹12,999 | ₹13,999 | |
| Realme 6 6GB/128GB | ₹14,999 | ₹15,999 | |
| Realme 6 8GB/128GB | ₹15,999 | ₹16,999 | |
| Realme 5 Pro 4GB/64GB | ₹12,999 | ₹13,999 | |
| Realme 5 Pro 6GB/64GB | ₹13,999 | ₹14,999 | |
| Realme 5 Pro 8GB/128GB | ₹15,999 | ₹16,999 | |
| Realme 5 3GB/32GB | ₹8,999 | ₹9,499 | |
| Realme 5 4GB/64GB | ₹9,999 | ₹10,499 | |
| Realme 5 4GB/128GB | ₹10,999 | ₹11,499 | |
| Realme 5i 4GB/64GB | ₹8,999 | ₹9,999 | |
| Realme 5i 4GB/128GB | ₹9,999 | ₹10,999 | |
| Realme C3 3GB/32GB | ₹6,999 | ₹7,499 | |
| Realme C3 4GB/64GB | ₹7,999 | ₹8,499 | |
| Samsung | Galaxy S20 | ₹66,999 | ₹70,500 |
| Galaxy S20+ | ₹73,999 | ₹79,900 | |
| Galaxy S20 Ultra | ₹92,999 | ₹97,900 | |
| Galaxy Z Flip | ₹1,09,999 | ₹1,15,890 | |
| Galaxy Note 10 | ₹69,999 | ₹73,600 | |
| Galaxy Note 10+ 12GB/256GB | ₹79,999 | ₹84,200 | |
| Galaxy Note 10+ 12GB/512GB | ₹89,999 | ₹94,700 | |
| Galaxy Note 10 Lite 6GB/128GB | ₹38,999 | ₹41,000 | |
| Galaxy Note 10 Lite 8GB/128GB | ₹40,999 | ₹43,100 | |
| Galaxy S10 Lite 8GB/128GB | ₹39,999 | ₹42,142 | |
| Galaxy S10 Lite 8GB/512GB | ₹44,999 | ₹47,300 | |
| Galaxy A71 | ₹29,999 | ₹31,500 | |
| Galaxy A51 | ₹23,999 | ₹25,250 | |
| Galaxy M31 6GB/64GB | ₹15,999 | ₹16,856 | |
| Galaxy M31 6GB/128GB | ₹16,999 | ₹17,910 | |
| Galaxy M30s 4GB/64GB | ₹13,999 | ₹14,749 | |
| Galaxy M30s 4GB/128GB | ₹14,999 | ₹15,803 | |
| Galaxy M30s 4GB/128GB | ₹15,999 | ₹16,856 | |
| Galaxy M21 4GB/64GB | ₹13,499 | ₹14,222 | |
| Galaxy M21 4GB/64GB | ₹15,499 | ₹16,329 | |
| OPPO | Reno3 Pro (Global) | ₹29,990 | ₹31,990 |
| Reno2 | ₹36,990 | ₹38,990 | |
| Reno2 Z | ₹25,990 | ₹27,490 | |
| Reno2 F | ₹21,990 | ₹23,490 | |
| Vivo | Vivo U20 | ₹17,990 | ₹19,990 |
| Vivo S1 4GB/128GB | ₹15,990 | ₹17,990 | |
| Vivo S1 6GB/64GB | ₹17,990 | ₹19,990 | |
| Vivo S1 Pro 8GB/128GB | ₹18,990 | ₹20,990 | |
| Vivo V17 8GB/128GB | ₹22,990 | ₹24,990 | |
| iQOO | iQOO 3 4G 8GB/128GB | ₹36,990 | ₹38,990 |
| iQOO 3 4G 8GB/256GB | ₹39,990 | ₹41,990 | |
| iQOO 3 5G 12GB/256GB | ₹44,990 | ₹46,990 |
The list above is incomplete but we’ll be adding more recently launched devices as we learn about the increase in prices of other smartphones in India. Needless to say, the tax increase will affect the entire industry. Those who can absorb the rise in cost, will; while those with thin margins will have no option but to pass on the burden to the end consumer. However, keep in mind that the country is on COVID-19-related lockdown, so sales on both offline and online platforms are on hold.
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