Apple may save billions as India considers extending tax breaks till 2041: Here is what we know
Follow UsApple could benefit from extended tax exemptions on machinery supplied to its Indian contract manufacturers until 2041.
The proposal aims to encourage global electronics brands to expand local manufacturing and supply chains in India.
The tax changes are still in draft form and will take effect only after approval by both Houses of Parliament.
Apple’s manufacturing operations in India may soon get a long term boost as the government is reportedly planning to extend tax incentives for foreign electronic companies until 2041. As per the Reuters report, the proposal is part of a draft amendment to India’s tax laws and is aimed at giving overseas firms greater certainty while investing in local manufacturing. The proposal will come into effect only if it is approved by both Houses of Parliament.
SurveyUnder the draft proposal, foreign companies supplying machinery to contract manufacturers producing smartphones, tablets, laptops, wearables and hearing devices in India can continue enjoying tax exemptions until 2041. The government has also proposed extending tax relief on income earned from storing and supplying components used by these manufacturers.
Also read: WhatsApp puts several accounts under review, users report 24 hrs restrictions
For the unversed, India had introduced a similar exemption earlier this year with benefits valid until 2031 after Apple reportedly sought clarity over tax rules. The iPhone maker had raised concerns that offering advanced manufacturing equipment to its Indian contract manufacturers can expose it to additional taxation under existing income tax provisions.
If this gets approved, the extension will allow Apple to continue supplying production equipment to its manufacturing partners without worrying about potential tax liabilities. The move is also expected to encourage other global electronics companies to expand manufacturing investments in India.
In the past few years. India has become an important production hub for Apple as the company diversifies its supply chain beyond China. As per Counterpoint Research, India is expected to manufacture 26 percent of the world’s iPhones in 2026, compared to just 6 percent four years ago. Reports also suggest Apple’s growing manufacturing presence has created nearly 3,50,000 direct and indirect jobs in the country.
This proposed amendment will also include tax relief for foreign companies using Indian data centres to serve global customers and revised rules covering component storage and supply.
