Apple’s India tax boost could strengthen its iPhone supply chain

Apple will benefit from India’s proposal to extend tax exemptions for foreign companies that supply machinery and components to contract manufacturers based in the country.

If the proposal goes through, it will directly benefit to Apple’s manufacturing ecosystem in India, where many components are still imported prior to assembly at one of its manufacturing partner’s iPhone factories there. Apple has been lobbying for these precise changes, and a temporary set of these exemptions was already in place.

India’s government now proposes extending the waiver until March 31, 2041, which lowers the tax threat Apple faces there. The ⁠extended tax exemption will apply to manufacturers of mobile phones, tablets, laptops, hearing and wearable electronic devices.

“The proposed tax changes will enable foreign companies to store and transfer critical equipment and components in India for their contract manufacturers, helping mitigate supply chain disruptions arising from trade uncertainties while providing greater tax certainty,” Riaz Thingna, a partner at Grant Thornton Bharat, told India’s Economic Times. 

The potential financial benefit is significant too, given that India is expected to make 26% of the world’s iPhones in 2026, up from just 6% four years ago.

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