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"About 70% of imported mobile phones and about 60 percent of domestically manufactured mobile phones are priced at Rs 2,000 or below," the Finance Minister said in his Budgetary speech.
Mobile phones enjoy a concessional excise duty of 1%.
"I do not propose to change that in the case of low priced mobile phones. However, on mobile phones priced at more than Rs 2,000, I propose to raise the duty to 6%," Chidambaram said.
Reacting to the proposal, domestic handset maker Lava said in the short term, all players would have to increase prices.
"The mobile phone segment is very competitive. But we have no option but to increase prices. It is a hard Budget for the mobile phone segment," Lava Founder and Director S N Rai said.
