The Indian government has proposed extending key tax exemptions for foreign companies supplying machinery to contract manufacturers until March 31, 2041, a move that could significantly strengthen Apple’s manufacturing expansion in the country.
The proposal extends the tax benefit by another 10 years beyond the earlier deadline of 2031, providing long-term certainty for global electronics companies investing in India.
Major Relief For Apple’s India Expansion
Apple is expected to be among the biggest beneficiaries of the proposed changes. The company relies on contract manufacturers to assemble iPhones in India and supplies high-end manufacturing equipment for production.
The extended tax exemption would ensure that foreign companies providing machinery to Indian contract manufacturers are not exposed to additional tax liabilities simply because they own the equipment used in production. This removes a key uncertainty for companies planning long-term manufacturing investments in India.
India’s Growing Role In Global iPhone Production
The proposal comes at a time when India’s role in Apple’s global supply chain is expanding rapidly.
According to the report, India is expected to manufacture 26% of the world’s iPhones in 2026, a sharp increase from just 6% four years ago. The shift reflects Apple’s strategy of diversifying production beyond China while making India one of its most important manufacturing hubs.
The proposed tax changes are expected to further encourage investment in electronics manufacturing and strengthen India’s position as a global production centre.
Benefits Extended Beyond Smartphone Manufacturing
The proposed exemption is not limited to smartphones. It will also apply to companies manufacturing laptops, tablets, wearable devices, and hearing devices through contract manufacturers.
In addition, the government has proposed tax exemptions for foreign companies storing and supplying components from customs-bonded areas until 2041, helping improve supply chain efficiency for export-oriented manufacturing.
The draft legislation also proposes easier tax benefits for foreign companies using leased data centres and introduces a 15-year tax exemption for foreign diamond miners and traders operating through designated trading zones.
Boosting India’s Manufacturing Ecosystem
The proposed amendments are aimed at attracting more global investment, strengthening supply chains, and enhancing India’s competitiveness as a manufacturing destination. If approved by Parliament, the changes are expected to provide long-term policy stability for multinational companies while supporting exports and high-value electronics production.
Summary
The Indian government has proposed extending tax exemptions for foreign companies supplying machinery to contract manufacturers until 2041, providing a major boost to Apple’s manufacturing expansion. With India expected to produce 26% of the world’s iPhones in 2026, up from 6% four years ago, the move is expected to attract more electronics investment, strengthen exports, and reinforce India’s position as a global manufacturing hub.