India has proposed extending tax exemptions for foreign companies supplying machinery to contract manufacturers until March 31, 2041, a move expected to significantly strengthen Apple’s manufacturing expansion and reinforce the country’s position as a global electronics production hub. The proposal, included in draft tax amendments, aims to provide long-term tax certainty for multinational companies investing in India’s manufacturing ecosystem, Reuters news report said.
The proposed extension is a major win for Apple, which had previously lobbied the Indian government to amend tax laws so that the company would not face tax liabilities for owning the high-end manufacturing equipment supplied to its contract manufacturing partners. India first introduced the tax exemption in February 2026, but it was valid only until 2031. The new proposal would extend the benefit by another 10 years, through 2041.
India has become central to Apple’s global smartphone manufacturing strategy as the iPhone maker diversifies production beyond China. According to Counterpoint Research, India is expected to produce 26 percent of the world’s iPhones in 2026, up sharply from 6 percent four years ago, highlighting the country’s rapid rise in global smartphone manufacturing.
The proposed tax incentives will apply to foreign companies providing equipment for the manufacturing of mobile phones, laptops, tablets, wearables, and hearing devices. The draft amendments also propose tax exemptions for storing and distributing electronic components in customs-bonded areas, a measure designed to support exports and strengthen India’s electronics supply chain.
In addition, the government plans to ease tax rules for foreign companies involved in India’s fast-growing data center sector by allowing Indian partners to lease, rather than own, data center infrastructure while still qualifying for tax benefits. The proposal is intended to reduce capital requirements and encourage broader foreign participation in digital infrastructure projects.
