India has proposed extending a machinery tax exemption that Apple lobbied hard to secure, pushing the deadline from 2031 out to 2041 and giving the company a much longer runway to finance equipment for its Indian assembly partners without triggering additional tax liability. The draft bill was introduced on August 3, 2026.
As reported by Reuters, the exemption covers foreign companies that supply machinery to their contract manufacturers inside India’s export-focused zones. Under existing Indian tax law, that kind of ownership arrangement creates what is classified as a “business connection,” which can expose a company’s global profits to Indian corporate tax. Apple had pushed for years to change this, arguing the rule put India at a disadvantage compared to China, where Apple supplies specialized assembly equipment to partners like Foxconn and Tata Electronics without incurring the same liability. The February 2026 version of the exemption, which ran to 2031, was the first major breakthrough. The August 2026 proposal adds a decade on top of that.
Assembly partners produced roughly 55 million iPhones in India in 2025, up from 36 million the year before, a 53% increase that now accounts for about a quarter of global iPhone output. The entire iPhone 17 lineup, including the Pro and Pro Max, is being assembled in India for the first time, as covered in our iPhone 17 production overview. Foxconn committed $1.5 billion to expanding its India operations last year, and Tata Electronics has grown into an equally central partner alongside it.
The proposed extension sits alongside a separate round of tariff cuts the Indian government introduced in July 2026, which eliminated duties of 7.5% and 5% on inputs for wireless charging hardware, automotive and medical device screens, and lithium-ion battery cells, with those exemptions running through March 31, 2029. Removing import costs on wireless charging components has a direct downstream effect on the MagSafe system built into the iPhone lineup, and gives Apple’s India-based assemblers a clearer path to sourcing those components locally rather than importing them at a markup.
India produced nearly $60 billion worth of mobile devices in the 2024-25 fiscal year, a figure the government describes as a 28-fold increase over a decade. Prime Minister Narendra Modi’s administration has set a target of $500 billion in electronics manufacturing by fiscal year 2030, and Apple’s expansion is central to that ambition. That alignment gives the Indian government its own structural incentive to keep the policy environment attractive, separate from any goodwill toward a single company.
The draft bill still needs to pass both houses of parliament before it takes effect, so the extension is not yet law. The February 2026 exemption cleared that process, and the government’s visible interest in keeping Apple’s investment flowing suggests a smoother path than most bills face, though parliamentary approval is not a formality.
A tax horizon stretching to 2041 matters primarily because equipment investment decisions for facilities that won’t be fully operational for several years depend on cost visibility over a long period. A 15-year window makes those decisions substantially easier to justify internally. Whether Apple can eventually assemble iPhones in India at true cost parity with China is a separate question, and one that analysts watching iPhone 18 Pro pricing are already asking, but the policy infrastructure is increasingly built to help it get there.
