India is reportedly considering an extension of tax breaks for contract manufacturing until 2041, a move that could significantly benefit Apple’s operations in the country. This proposal is designed to provide long-term tax certainty for foreign firms, particularly those like Apple that supply machinery to local contract manufacturers. The changes to tax regulations will only come into effect if approved by both Houses of Parliament.

Details of the Tax Proposal

The draft bill includes provisions for extending tax exemptions on equipment supplied to companies involved in the production of mobile phones, tablets, laptops, hearing devices, and wearable electronics. In addition, the proposal suggests exempting from income tax the revenue generated by foreign firms from storing and supplying parts used in the assembly of these products in India until 2041.

This initiative builds on the existing tax exemption introduced in February 2026, which was originally set to last until 2031. This initial exemption was partly a response to Apple’s efforts to encourage changes to income tax regulations. The company had indicated that control over high-end manufacturing machinery could lead to potential tax liabilities on its profits from iPhone sales in India.

The extension of the tax breaks might not only benefit Apple but could also encourage other global corporations to invest in similar manufacturing setups in India. This effort aligns with India’s goal of becoming a significant manufacturing hub as global firms seek alternatives to reliance on Chinese production.

Impact on Apple’s Manufacturing in India

India has emerged as a crucial manufacturing location for Apple as the company diversifies its production operations. According to Counterpoint Research, it is projected that India will produce 26 per cent of the world’s iPhones by 2026, a significant increase from 6 per cent recorded four years ago. Analysts suggest that the proposed tax incentives could promote further expansion of iPhone manufacturing in India.

Apple’s expanded presence in India has reportedly generated approximately 3,50,000 jobs, both directly and indirectly. This initiative reflects Apple’s commitment to enhancing its supply chain and operational capabilities within the Indian market.

Furthermore, the company has experienced substantial growth within the premium smartphone segment. Reports indicate that the iPhone 16 was the best-selling smartphone in India last year, signalling strong consumer demand in this category.

Additional Proposed Amendments

The draft amendments also encompass tax relief for foreign companies involved in storing and supplying components for electronics manufacturing. Moreover, there are provisions for simplified regulations regarding data centre services used by foreign firms in India. Another proposal includes a 15-year tax exemption for foreign diamond miners and traders who engage in the sale of rough diamonds through designated trading zones.

In February 2026, the Indian government had announced a tax exemption lasting until 2047 for foreign companies utilising data centres in India to deliver services to international clients. This policy addresses concerns that global income might be taxed when using these facilities. The recent bill also allows for data centres to be leased rather than owned by Indian partners of foreign companies.

Overall, the proposed changes illustrate India’s efforts to create a more inviting environment for foreign investment, aiming to stimulate economic growth and enhance its standing as a global manufacturing hub.

Long or Short, get news the way you like. No ads. No redirections. Download Newspin and Stay Alert, The CSR Journal Mobile app, for fast, crisp, clean updates!

App Store –  https://apps.apple.com/in/app/newspin/id6746449540 

Google Play Store – https://play.google.com/store/apps/details?id=com.inventifweb.newspin&pcampaignid=web_share