5000 Indian mobile retailers close their doors to protest increased handset sales tax

When purchasing a mobile phone in India, you pay an additional tax. The tax rate used to be 4%, but now it is 12.5% according to Cellular-News, which is an increase of 312.5%. This has pissed a lot of Indians off, so much so that in the state of Maharashtra appropriately 5000 mobile phone shops closed. In Mumbai, sales of mobile phones have been reported to have fallen around 60%. Vipul Sabharwal, Director of Sales at Nokia (NYSE: NOK), which is the market leader in India by a wide margin, said something to the tune of: higher taxes should equal more revenue for the government, but you can’t rape people with fees of they’re simply going to just stop buying handsets. I’ll be watching this very closely. The implications are enormous, especially since a lot of people are trying to compete with Nokia in the low to mid range segment and since India connects over 10 million new people a month.