India proposes extending tax breaks for contract manufacturing until 2041, boosting Apple

Published Aug 8, 03:25 PM UTC

India has proposed extending tax exemptions until 2041 for foreign companies that provide machinery to contract manufacturers, a major win for Apple which had lobbied for such changes. Apple feared that Indian tax laws could treat ownership of machinery supplied to contract manufacturers as a 'business connection', exposing its iPhone profits to tax, unlike in China. The draft bill also exempts foreign companies' income from storing and providing parts for electronics manufacturing in customs-bonded areas until 2041, making such facilities attractive for exports. Additionally, India has eased tax exemptions for foreign companies using data centers, allowing leasing instead of ownership. India is a key market for Apple as it diversifies iPhone manufacturing beyond China, with Counterpoint Research estimating India will produce 26% of the world's iPhones in 2026, up from 6% four years ago.