Budget 2025: Mobile retailers seek tax cuts, easier loans and lower MDR

Mobile

Mobile retailers, represented by their industry body AIMRA, have called for a cut in the goods and services tax (GST) on handsets from 18 percent to 5 percent, saying the current rate hinders affordability and drives consumers toward the grey market.

The All India Mobile Retailers Association (AIMRA) also called for tax exemptions for small retailers with annual incomes below Rs 10 lakh to support small-scale businesses.

The retailers also urged the government to allow non-banking financial companies (NBFCs) to provide collateral-free loans of up to Rs 20 lakh to help retailers expand their operations.

They also demanded the merchant discount rate (MDR) on credit and debit card transactions to be lowered to 0.5 percent, saying it would promote digital payments while reducing the financial burden on businesses.

AIMRA, representing 1.50 lakh mobile retailers across the country, said these measures will improve affordability, support small businesses and encourage digital payments.

“The mobile phone industry plays a vital role in India's economy, contributing significantly to GDP and providing employment to a vast workforce. However, challenges such as the grey market and high GST rates are hindering the growth of this crucial sector,” AIMRA founder-chairman Kailash Lakhyani said a letter to Finance Minister Nirmala Sitharaman.

Mobile retailers are at loggerheads with Chinese smartphone brands and has accused them of engaging in anti-competitive practices such as prioritising online sales channels that result in financial losses for the government.

They urged the Centre to prohibit Chinese-owned brands such as iQoo (owned by Vivo), Poco (owned by Xiaomi), and OnePlus (owned by Oppo) from doing business in India.

Retailers previously also sought the intervention of commerce and industry minister Piyush Goyal.

Last year, the Competition Commission of India (CCI) accused Chinese smartphone makers and Samsung of collaborating with Amazon and Flipkart to roll out their products exclusively on these e-commerce platforms in breach of antitrust laws.

A probe by CCI found that Amazon and Flipkart violated local competition laws by giving preference to select sellers, prioritising certain listings and steeply discounting products, hurting other companies.