Your data usage in India might soon be taxed
What's the story
The Indian government is mulling the introduction of a tax on data usage, as part of its revenue generation strategy. The proposal was discussed in a recent review meeting chaired by Prime Minister Narendra Modi. The Department of Telecommunications (DoT) has been tasked with studying this potential tax and its feasibility by September 2026.
Dual purpose
Tax aims to promote positive data consumption
The proposed tax isn't just about revenue generation. It also aims to reduce screen time, particularly among children. The DoT has been asked to come up with a model that promotes positive data consumption while curbing activities that could lead to addiction in kids.
Expert opinion
Experts warn of negative impact on users
Satya N. Gupta, former principal advisor at the Telecom Regulatory Authority of India (TRAI), has raised concerns over the proposed tax on data usage. He said such a move would be impossible to implement and could disrupt services for users in India while stifling innovation. Gupta warned that this might jeopardize India's leadership position in the emerging domain of digital technology.
Revenue diversification
Potential revenue generation for government
The proposal for a data tax also comes as the government looks to diversify its telecom revenue beyond spectrum auctions and license fees. Currently, users pay an 18% GST on mobile recharges. In FY25, India's mobile data usage was around 229 billion GB. A levy of ₹1 per GB could generate ₹22,900 crore in revenue for the government.