India Proposes Extending Tax Breaks for Contract Manufacturing, Benefiting Apple
India has proposed extending tax exemptions until March 31, 2041, for foreign companies supplying machinery to contract manufacturers in the country. This move is seen as a major win for Apple Inc., which had lobbied for such changes and is rapidly expanding its manufacturing presence beyond China into India. The draft amendments aim to provide tax certainty by exempting income from storing components used in electronics production, including mobile phones, tablets, laptops, wearables, and hearing devices. These exemptions apply within customs-bonded areas but do not cover domestic sales due to import taxes. The changes are expected to help foreign firms mitigate supply chain risks while benefiting India's growing manufacturing sector. Additionally, the government is making it easier for foreign companies using data centers in India by allowing leases instead of ownership, reducing capital requirements and encouraging smaller players to enter the market.
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