GST Reforms Propel India's Tech and Electronics Growth

India's recent Goods and Services Tax (GST) reforms are poised to invigorate the nation's electronics sector, particularly under the purview of the Ministry of Electronics and Information Technology (MeitY). By slashing rates on consumer electronics, the government's initiative aims to make essential tech products more affordable while enhancing domestic manufacturing, supporting MSMEs and start-ups, and aligning with the aspirations of Digital India and Aatmanirbhar Bharat, according to an official release.

The tax reduction, lowering GST on air conditioners, dishwashers, and large-screen televisions (LCD and LED) from 28 percent to 18 percent, is expected to stimulate domestic demand and household affordability. This move is anticipated to strengthen supply chains in component industries like compressors, displays, and semiconductors, opening new doors for MSMEs involved in plastics, wiring, cooling systems, and LED panel assembly. By promoting localisation, the reforms aim to reduce import dependence while enhancing household convenience with cheaper dishwashers.

In other sectors, lowering GST on monitors and projectors from 28 percent to 18 percent will benefit educational institutions, offices, and digital learning centres, promoting affordability in ICT hardware. This directly supports the IT sector, fosters the start-up ecosystem, and advances digital education. Similarly, reducing GST on non-Li-ion electric accumulators, including power banks, will make energy storage solutions more accessible, encouraging efficient energy system adoption in homes and workplaces.

Security and sustainability aspects also gain from these reforms. GST on two-way radios, or walkie-talkies, has been trimmed from 12 percent to 5 percent, decreasing procurement costs for police, paramilitary, and defense forces. Additionally, the GST cuts on renewable energy devices and solar photovoltaic cells from 12 percent to 5 percent lower renewable energy deployment costs at household and industrial levels. Composting machines now attract a 5 percent GST rate, promoting waste-to-energy solutions and supporting the vision of sustainable, smart cities.

The GST overhaul is expected to drive growth across India's electronics and technology ecosystem. It is anticipated to spur demand, lower costs, create job opportunities, promote localisation, and further integrate India into global value chains, as outlined in the release.

(With inputs from agencies.)