Boost for Apple? India proposes extending tax breaks for manufacturing till 2041

Apple may have just received a big boost. As per reports, India has proposed extending tax exemptions for contract manufacturing till 2041. This comes at a time when Apple is increasing iPhone production in the country as it reduces dependence on Chinese manufacturing.India is reportedly planning to extend contract manufacturing tax breaks till 2041, which could benefit Apple. (Photo: Reuters)Apple’s India operations may be about to receive a big boost. India is reportedly planning to extend tax breaks for contract manufacturing in the country till 2041. This move could benefit Apple as it continues to expand iPhone production in the country.As per a report from Reuters, the proposal, part of draft amendment to tax laws, is aimed at providing long-term tax certainty for foreign companies like Apple that supply machinery to their contract manufacturers in the country. Before we understand what the exemption actually means to Apple, keep in mind that the changes will take effect only if they are passed by both Houses of Parliament.Tax breaks for Apple till 2041?Under the draft bill, the extended exemption for equipment supplied to contract manufacturers will apply to companies linked to the production of mobile phones, tablets, laptops, hearing devices and wearable electronic devices. The government has also proposed exempting until 2041 the income of foreign companies from storing and providing parts used to make these products for contract manufacturers in India.India introduced the tax exemption for foreign companies in February this year, with validity until 2031, after Apple lobbied the government to change income tax rules. Apple had argued that ownership of high-end iPhone manufacturing machinery supplied to its contract manufacturers in India could be treated as a "business connection" under Indian tax laws, potentially exposing its iPhone profits to tax. Now, the same incentives may extend till 2041, allowing the company to give high-end equipment to its contractors without having to worry about income tax laws.The proposal can also incentivise other global companies to bring similarly machinery for their respective contractors too. India has become an important manufacturing base for Apple as it diversifies production beyond China. According to Counterpoint Research, India is set to make 26 per cent of the world's iPhones in 2026, up from 6 per cent four years ago. It is believed that Apple may further expand iPhone manufacturing in the future, with the tax breaks potentially acting as a further incentive.As per reports, Apple’s decision to expand iPhone manufacturing in India has created roughly 3,50,000 direct and indirect jobs in India.In terms of market share too, Apple has continued to see growth in the premium segment in India. As per reports, the iPhone 16 was the best-selling smartphone in India last year.What else is being proposed?The proposed amendments also cover tax relief for income earned by foreign companies from storing and supplying components for electronics manufacturing, easier rules for foreign companies using data centre services in India, and a 15-year tax exemption for foreign diamond miners and traders selling rough diamonds through designated trading zones.India has also proposed changes for foreign companies using data centre services in the country. In February, the government announced a tax exemption until 2047 for foreign companies using data centres in India to provide services to global clients, addressing concerns that their global income could later be taxed for using such facilities. The latest bill allows data centres to be leased instead of being owned by the Indian partners of foreign companies.- EndsPublished By: Armaan AgarwalPublished On: Aug 4, 2026 08:28 IST