The Indian government has proposed extending important tax exemptions for foreign companies supplying machinery to contract manufacturers until March 31, 2041.
If approved, the move will give global companies long-term policy certainty and could significantly strengthen Apple’s manufacturing expansion in India.
The proposal extends the existing tax benefit by 10 more years, beyond the earlier deadline of 2031.
Apple Could Be the Biggest Beneficiary
Apple is expected to benefit the most from the proposed tax changes.
The company supplies advanced manufacturing equipment to its contract manufacturers that assemble iPhones in India.
Under the proposed rules, foreign companies owning this equipment will continue to enjoy tax exemptions, helping them avoid additional tax liabilities.
This is expected to encourage Apple and its suppliers to make long-term investments in India’s manufacturing sector.
India’s Role in iPhone Production Is Growing
India has become an increasingly important part of Apple’s global supply chain.
According to reports, India is expected to manufacture 26% of the world’s iPhones in 2026, a huge jump from 6% just four years ago.
Apple has been steadily shifting part of its production away from China, and India is emerging as one of its biggest manufacturing hubs.
Tax Benefits Will Cover More Than Smartphones
The proposed tax exemption is not limited to iPhone production.
It will also benefit companies manufacturing products such as:
Laptops
Tablets
Wearable devices
Hearing devices
The government has also proposed tax exemptions until 2041 for foreign companies storing and supplying components from customs-bonded areas, which could make supply chains faster and more efficient.
More Measures to Attract Global Companies
Apart from electronics manufacturing, the draft legislation includes several other proposals to encourage foreign investment.
These include easier tax benefits for companies using leased data centres and a 15-year tax exemption for foreign diamond miners and traders operating through designated trading zones.
What This Means for India
The proposed changes are aimed at attracting more global manufacturers, increasing exports, and strengthening India’s position as a global manufacturing hub.
If Parliament approves the proposal, it could provide long-term stability for multinational companies while helping India become an even bigger centre for high-value electronics production and global supply chains.
