India to Tax Mobile Data: A World-First Plan to Raise Billions

India is considering a groundbreaking tax on mobile data usage, a move that would be unprecedented globally. The proposed levy would charge users one Indian rupee – approximately one US cent – for every gigabyte of data consumed, according to reports from the Financialexpress.

The Indian government hopes the tax will boost state revenue and encourage more responsible technology use, particularly among younger generations, by curbing excessive screen time. However, the proposal has drawn criticism for its potential impact on low-income groups and students reliant on online learning.

Even as one rupee per gigabyte may seem modest, the cumulative cost could be significant for average users. A typical Indian mobile user consumes around 21 GB of data per month, potentially adding nearly 19 cents to their monthly bill. Users with standard 2 GB daily plans would face an additional charge of approximately 55 cents per month, on top of the existing 18% value-added tax, effectively creating a double taxation scenario.

India is already the world’s largest consumer of mobile data. Operators have warned they are unable to absorb the cost of the tax and will likely pass it on to consumers through higher tariffs or reduced data allowances. The dramatic increase in data consumption is a relatively recent phenomenon, driven by a steep decline in data costs. In 2016, 1 GB of data cost around 2 euros (approximately 225 rupees). The entry of a new telecom operator sparked a price war, driving costs down to between 7 and 14 cents per GB today. Each additional rupee therefore represents a substantial increase for consumers.

Prior to 2016, the average Indian mobile user consumed less than 1 GB of data monthly. Currently, that figure has risen to approximately 27.5 GB per user. Many data plans are now unlimited, which would necessitate operators reintroducing data usage measurement to implement the tax.

The Ministry of Telecommunications (DoT) is expected to submit a feasibility report on the proposal by September 2026. Potential revenues from the tax are estimated at up to 2.16 billion euros annually, funds earmarked for infrastructure projects like highway construction and healthcare improvements. However, experts caution that data consumption may decrease following the implementation of the tax, potentially reducing the actual revenue generated.