3 min learnNew DelhiFeb 2, 2026 10:35 AM IST
India’s authorities on Sunday handed a serious win to Apple by permitting international corporations to supply machines to their contract producers in sure areas for 5 years with none tax danger.
Apple has been rising in India in recent times because it diversifies past China. Counterpoint Analysis says iPhone’s share of the Indian market has doubled to eight% since 2022. And whereas China nonetheless accounts for 75% of world iPhone shipments, India’s share has quadrupled to 25% since 2022.
Apple had been lobbying India’s authorities to change its revenue tax legal guidelines to make sure the corporate isn’t taxed for possession of the high-end iPhone equipment it offers to its contract producers.
In India, in contrast to China, Apple was involved that if it paid for machines for its contract producers, Indian legislation may contemplate {that a} so-called “enterprise connection” and impose taxes on its iPhone gross sales income. That had compelled its contract producers Foxconn and Tata to themselves spend billions of {dollars} on machines.
India on Sunday mentioned that “to advertise manufacturing of digital items for a contract producer”, it’s ensuring legislation adjustments to make sure that mere possession of machines by a international firm doesn’t result in taxes on it.
The choice was made public as a part of Finance Minister Nirmala Sitharaman’s 2026-27 annual finances, introduced on Sunday.
The transfer may immediate Apple and different corporations to take a position quickly within the electronics manufacturing house by taking up preliminary bills for dear machines, lowering the preliminary price burden on contract producers they companion with.
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“We’re saying that if you happen to convey your machine, and that machine is utilized by a neighborhood producer to supply one thing, we’ll … exempt you for five years. We’re giving them certainty,” Income Secretary Arvind Shrivastava mentioned at a post-budget press convention.
Quicker scale-up and higher confidence
Smartphone manufacturing is a key plank of Prime Minister Narendra Modi’s agenda for financial development.
The rule change will apply till the 2030-31 tax 12 months and solely to factories arrange in so-called customs-bonded areas – that are technically thought of being exterior India’s customs border. If units are bought inside India from such factories, they’ll appeal to import taxes, making such amenities enticing just for exports.
“Any revenue arising on account of offering capital items, tools or tooling to a contract producer, being an organization resident in India, is eligible for exemption,” the Indian authorities mentioned in one in all its explanatory finances paperwork.
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Apple didn’t instantly reply to a request for remark.
“This exemption removes a key deal-breaking danger for electronics manufacturing in India,” mentioned Shankey Agrawal, a companion at Indian tax-focussed legislation agency BMR Authorized. “The result’s quicker scale-up and higher confidence for international electronics gamers to fabricate in India.”
Apple held many discussions with Indian officers in current months to tweak the legislation because it feared the laws may hamper its future development, Reuters has reported.
The sooner guidelines didn’t have an effect on Apple’s South Korean rival Samsung as nearly all of its telephones are made in its personal Indian factories, and never by contract producers.
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