The Indian government has proposed extending tax exemptions for foreign companies supplying machinery to contract manufacturers until March 31, 2041, a move that is expected to strengthen the country’s position as a global manufacturing hub and benefit companies such as Apple.
According to a draft of the proposed tax amendments, the extension aims to provide long-term tax certainty for foreign firms investing in India’s manufacturing sector. The exemption, introduced earlier this year and originally scheduled to remain in force until 2031, would now continue for an additional decade if approved.
The proposal is expected to provide significant relief to Apple, which has been expanding its iPhone manufacturing operations in India as part of its strategy to diversify production beyond China. Apple had sought changes to India’s tax framework over concerns that ownership of machinery supplied to its contract manufacturers could be treated as a taxable business connection under existing laws.
Industry estimates suggest that India’s share of global iPhone production is expected to rise sharply, reaching around 26 per cent in 2026, compared with approximately 6 per cent four years ago, reflecting the country’s growing importance in Apple’s global supply chain.
The proposed tax amendments are aimed at encouraging greater foreign investment, enhancing manufacturing competitiveness and providing policy stability for global companies operating in India. If implemented, the measure is expected to further support the government’s broader objective of making India a preferred destination for high-value electronics manufacturing and exports.
