The Indian government has proposed extending tax exemptions until March 31, 2041, for multinational corporations that supply machinery and components to local contract manufacturers, delivering long-term policy certainty to global technology giants like Apple Inc. According to draft amendments to tax legislation, the revised measure expands upon an earlier exemption introduced with a 2031 deadline, providing a ten-year extension aimed at bolstering domestic electronics production. Under Indian income tax rules, foreign firms previously faced potential tax exposure on global revenue if equipment supplied to local assembly partners was classified as an Indian “business connection”. The proposed relief addresses these concerns by explicitly exempting foreign equipment owners from domestic tax liabilities on imported high-end manufacturing machinery, as well as on components stored in customs-bonded warehouses for export assembly.
The policy enhancement directly supports Apple’s ongoing operational pivot to diversify supply chains and shift greater iPhone manufacturing volumes into India. Market intelligence estimates project that India could assemble roughly 26% of global iPhone output in 2026, marking a substantial increase from just 6% four years prior. Subject to final approval by both houses of Parliament, the extended framework is designed to lower capital expenditure barriers for contract assemblers such as Foxconn and Tata, while shielding parent companies from unforeseen tax liabilities. Industry experts note that establishing a predictable two-decade tax window will strengthen India’s competitive positioning against traditional Asian manufacturing hubs, encourage deeper component ecosystem investments, and accelerate the creation of skilled industrial jobs across the domestic electronics corridor.
