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The Indian government decided to hike the Goods and Services tax on mobile phones to 18% from 12% last month.

What you need to know

• Many popular brands have increased prices of their smartphones in India due to the hike in Goods and Services Tax on smartphones from 12% to 18% by the Indian government.
• Vivo is raising prices by up to ₹2,000 ($26), while Samsung has hiked prices by up to ₹6,000 ($79).
• The government's move is expected to lead to immediate job losses and could put a damper on future investments in manufacturing in the country.

Several popular brands today announced that they are increasing the prices of their smartphones in India. The companies were forced to hike prices after the Indian government increased the Goods and Services Tax on mobile phones from 12% to 18%.

Mi fans, #GST on mobile phones has increased by 50% from 12% to 18%.

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

— Manu Kumar Jain (@manukumarjain) March 31, 2020

Xiaomi, which is currently India's No.1 smartphone vendor in terms of market share, said in a statement that it had "no option than to increase prices" due to the hike in GST rates and the significant depreciation of the Indian Rupee against the U.S. Dollar. Redmi has raised the price of the K20 by ₹2,000 ($26), while prices of the POCO X2 have gone up by ₹1,000 ($13).

Just like Xiaomi and its sub-brands, other Chinese smartphone makers like OPPO, Vivo, and Realme have also decided to hike prices of their phones in the country. While Samsung hasn't issued any official statement yet, reports claim the company has told its retail partners that it is increasing prices of its phones by up to ₹6,000 ($79). The Galaxy S20 Ultra, which was launched at ₹92,900 ($1,220) in the country last month, now starts at ₹97,900 ($1,285).

Smartphone makers believe that the GST hike on phones is a "counter-intuitive and insensitive" move that is likely to result in immediate job losses and could discourage future manufacturing investments in India.

OnePlus dominated India's premium smartphone market in 2019