Proposed changes to a tax policy in India could significantly benefit Apple and other foreign companies by extending favorable conditions. The revised policy would allow businesses to avoid paying Indian income tax when they supply machinery and tools to contract manufacturers. The original timeline for the tax break was set to end in 2031, but the proposed amendment extends it until 2041, ensuring long-term advantages for foreign investors.
Under the draft policy, the tax exemption would cover companies that create mobile phones, tablets, and other wearable devices. This tax break is available to manufacturers and storage centers located in customs-bonded areas. These areas are treated as if they are beyond India’s customs boundaries. While items made in these zones can be exported without tax issues, any products sold within the country would require import duties. These facilities are ideal for export-focused operations.
The tax incentive is considered a major win for Apple. Apple has been pushing for such relief. This comes at a time when India has also slashed import duties on vital smartphone components. These cuts make India a more appealing manufacturing hub. The changes support Apple's broader plan to shift production out of China. They also support moving production into other regions. According to research from Counterpoint, India is projected to produce 26% of the world's iPhones in 2026. This is up from just 6% four years earlier. The extended tax break, combined with recent import duty cuts, strengthens India's position. It strengthens India as a key player in the global supply chain. These changes align with Apple's strategy to diversifie manufacturing locations.