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Apple’s contract manufacturing tax breaks in India could be extended to 2041
The Indian government is considering an extension of a tax break for foreign companies providing machinery and equipment to contract manufacturers until 2041. This exemption allows foreign firms to avoid Indian income tax on equipment ownership used by local contract manufacturers. The draft amendment aims to facilitate Apple’s production expansion in India, positioning the country as a critical site for manufacturing mobile devices. Notably, recent removal of import duties on smartphone components further supports this initiative.
MonitorConfidence: HighMid term horizon
Published 3 Aug 2026, 22:30 UTC1 min read
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Summary
TL;DR
- Tax break extension applies to contract manufacturers until 2041.
- Exemption reduces Indian income tax liability for foreign companies.
- Aims to boost local production, particularly for Apple devices.
- India's manufacturing share of iPhones is projected to rise significantly.
- Recent removal of import duties complements the tax exemption strategy.
Interesting facts
- India's share of global iPhone production expected to increase to 26% by 2026.
- Apple lobbied for the initial tax exemption prior to its introduction earlier this year.
- Factories in customs-bonded areas are treated as outside of India's customs border.