Next-Gen GST reforms to drive demand, promote localisation, generate jobs, and deepen global value chain integration in the electronics ecosystem

The recent next-generation reforms in Goods and Services Tax (GST) are set to accelerate growth across consumer electronics, Information and Communication Technology (ICT) hardware, and renewable energy sectors under the Ministry of Electronics and Information Technology (MeitY). By reducing GST rates, the Government aims to make products more affordable, boost domestic manufacturing, and support Micro, Small, and Medium Enterprises (MSMEs) and start-ups under the vision of Digital India and Aatmanirbhar Bharat. The GST cut on air conditioners, dishwashers, and large-screen televisions from 28% to 18% is expected to stimulate household demand while creating stronger backward linkages in compressors, semiconductors, and Light Emitting Diode (LED) panels. Similarly, the reduction in GST on monitors, projectors, and non-Lithium-ion accumulators, including power banks, from 28% to 18% will lower costs for education, offices, and start-ups, thereby strengthening digital adoption and energy efficiency.

In parallel, the Government has also reduced GST on two-way radios from 12% to 5%, improving affordability for security forces and enhancing communication infrastructure. Renewable energy devices and solar photovoltaic cells now attract only 5% GST, compared with 12% earlier, significantly reducing deployment costs for both households and industries. Composting machines will also benefit from a lower GST of 5%, encouraging waste-to-energy adoption in line with smart city initiatives. Collectively, these reforms will not only expand consumer access but also promote localisation, create new opportunities for MSMEs in components and assembly, and reduce dependence on imports. By stimulating demand, driving sustainability, and integrating India further into global value chains, the GST reforms are expected to generate employment and strengthen India’s position as a global hub for electronics and green technology.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.