Xiaomi increases prices of its phones to offset GST hike
Xiaomi has raised the prices of its smartphones as the revised GST tariff comes into effect today.
Xiaomi on Wednesday announced increasing prices of its smartphones after the hiked GST rates on mobile phones came into effect today.
Xiaomi VP and India MD Manu Kumar Jain said, "After much deliberation & in keeping with Xiaomi policy of maintaining <5% margin on our hardware products, we will be increasing prices of our products."
The new prices will reflect on the company's official website soon, he added.
Jain also pointed out that Indian Rupee has depreciated significantly against the US Dollar.
Last month, the government announced raising GST rates on mobile phones from 12% to 18%. The increase in GST came at a time when the smartphone companies are already bearing the brunt of disruption caused by the Covid-19 pandemic.
Manu Kumar Jain had said that the move will crumble the smartphone industry. India Cellular and Electronics Association (ICEA) chairman Pankaj Mohindroo called this decision detrimental to the vision of Digital India.
Mi fans, #GST on mobile phones has increased by 50% from 12% to 18%.— Manu Kumar Jain (@manukumarjain) March 31, 2020
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
"The increase of GST by 6% will be extremely detrimental to the vision of Digital India. Consumption will be stymied and our domestic consumption target of USD 80 billion (6 lakh crores) by 2025 will not be achieved. We will fall short by atleast 2 lakh crores. This was time for statesmanship especially when the country is going through a crisis and as a nation, we have fallen short," he said.
Apart from Xiaomi, Oppo has also raised the prices of its smartphones.
"As a customer-centric technology brand, OPPO is striving for keeping customer satisfaction at the core, OPPO has been providing cutting-edge technology to consumers at different segments for the Indian market. OPPO respects the decision from the GST (Goods and Services Tax) Council, after serious consideration, we will be revising the prices of our products from April 1, 2020, across all platforms. We will keep monitoring the market situation and pass on the benefits to our consumers in our endeavour of bringing the best products to them at an affordable price range in the future," the company said in a statement.