This festive season, India’s electronics market is set for a shake-up—one that shifts the limelight from pocket-sized devices to living room giants. The GST Council’s latest reform has slashed the levy on televisions of 32 inches and above by 10 percentage points, bringing the tax down to 18%. While smartphones, India’s largest electronics segment, remain in the same slab despite industry pleas, the decision is expected to drive a surge in demand for big screens and other home appliances.
The Tax Break That Changes the Game
The council’s move is more than a number on paper. For millions of households, it transforms televisions and air conditioners—often seen as aspirational items—into more accessible lifestyle choices. Manish Sharma, India chairman of Panasonic Life Solutions, noted that this reform, coupled with income tax revisions, will give households more disposable income and spur consumer confidence.
Market experts agree. IDC India’s Navkendar Singh sees a “major fillip” for TV sales, while ICEA’s chairperson Pankaj Mohindroo highlighted that the cut was a long-standing industry demand. For manufacturers, it not only expands market size but also strengthens localization, builds backward linkages, and reduces import dependency—key factors in scaling India’s domestic electronics sector.
Impact on the Electronics Market
With Indians buying 12 million TVs and 14 million ACs in 2024—together forming a $13 billion market—the GST cut arrives at a critical moment. Analysts expect high single-digit growth in sales through 2025. Still, as Singh cautioned, much depends on whether brands pass the benefits to consumers or retain them to improve margins in a fiercely competitive market.
The reform is also likely to ripple beyond metros. Emerging markets, where affordability remains a barrier, may see stronger adoption of larger TVs and ACs. This could boost volumes for domestic producers and create opportunities for smaller suppliers and MSMEs.
Smartphones: The Silent Bystanders
While large screens earned the spotlight, smartphones—worth nearly $45 billion annually—were left out of the GST reshuffle. The industry had lobbied for a reduction to the lowest slab of 5%, but the council maintained the rate at 18%.
The reason is clear: smartphones contributed nearly $7 billion to indirect tax revenue in 2024–25, around 3% of overall GST collections. Cutting the tax would have meant a significant revenue dip for the Centre. IDC’s Singh described it as a “missed opportunity” to revitalize a stagnant segment, but industry leaders admit expectations of a cut were always slim.
Interestingly, insiders suggest the smartphone sector is far from disheartened. Given the size, profitability, and resilience of the market, the unchanged rate does not pose an imminent threat. Still, bodies like ICEA remain hopeful that the government will eventually consider rate cuts for smartphones and laptops to further digital inclusion.
The Road Ahead
The GST reform is more than a festive boost—it could reshape India’s consumer electronics market. By making big-ticket items more affordable, the council has created an environment ripe for higher consumption and stronger domestic production.
Yet, the full impact hinges on execution: whether companies translate tax relief into consumer savings and whether demand from emerging markets truly materializes. For now, though, one thing is clear: this festive season, big screens are set to shine brighter than ever.
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