India wants more of Apple’s business. The government in New Delhi has floated a plan to stretch tax exemptions for foreign firms supplying machinery and parts to local contract manufacturers all the way to 2041. The move comes as Apple assembles one in four iPhones sold worldwide inside Indian factories. And it signals just how far officials will go to keep that momentum alive.
The draft proposal, first reported by Reuters, builds on changes introduced in February 2026. Those original breaks shielded foreign companies from tax hits when they provided equipment to Indian partners such as Foxconn and Tata Electronics. Without the relief, Apple risked tax liabilities on machinery it owned but let suppliers use. Officials listened. They acted. Now they propose doubling down with another decade of certainty.
Production numbers tell the story. Apple shipped roughly 55 million iPhones from India in 2025. That marked a 53 percent jump from the prior year, according to people familiar with the matter who spoke to Bloomberg. The country’s share of global output climbed to about 25 percent. Analysts at Smart Analytics Global project it could hit 28 percent in 2026. China’s dominance, once near total, has slipped to 74 percent. The shift isn’t subtle.
But scaling isn’t automatic. Suppliers need expensive, specialized tools. They need warehouses full of components. They need confidence that tax rules won’t change midstream. The new proposal addresses exactly those pain points. It would let foreign firms store and ship parts inside customs-bonded zones without triggering import duties or income tax exposure. The catch? Everything made there must be exported. Sell inside India and normal tariffs apply. Simple. Effective.
Zero duties on key parts. That’s the practical outcome for export-focused lines. India already scrapped 5 percent and 7.5 percent import levies on lithium-ion cells, wireless charging components and certain displays in July. iClarified detailed the move, which runs through March 2029. Combine that with the extended machinery exemption and the math improves for Apple and its partners. Costs drop. Margins expand. Investment looks safer.
Apple didn’t stumble into this position. Executives lobbied quietly for the February changes after earlier tax disputes. Revenue Secretary Arvind Shrivastava explained the logic at the time, according to Reuters. “We are saying that if you bring your machine, and that machine is used by a local manufacturer to produce something, we will exempt you for 5 years. We are giving them certainty.” The proposed extension to 2041 would hand Apple and others that same certainty for 15 years total. Long enough to justify billion-dollar bets on new lines.
Tata’s gleaming component plant in Hosur, Tamil Nadu, stands as visible proof. The conglomerate has poured resources into displays, enclosures and assembly. Foxconn and Pegatron have expanded their own footprints. Cumulative iPhone exports from India crossed $50 billion in just five years, AppleInsider noted in its coverage of the latest proposal. That figure doesn’t include the broader supply chain spending or jobs created. Estimates put direct and indirect employment in the tens of thousands.
The incentives don’t stop at hardware. The same draft would tweak rules around data centers. A February tax break already shields foreign operators serving global users until 2047. The update would allow Indian companies to lease those facilities instead of owning them outright. Capital requirements fall. Smaller players can participate. For Apple, which runs massive cloud and services operations, the flexibility matters. It reduces risk in a market still finding its footing on data sovereignty questions.
Yet challenges remain. Labor skills vary. Logistics outside major hubs can lag. Geopolitical tensions between India and China add another variable. Still, officials see electronics as a cornerstone of their manufacturing push. The original production-linked incentive scheme, worth nearly $21 billion, helped launch the iPhone ramp. It expires this year. Fresh incentives are already in discussion. Reuters reported on those plans back in March. The latest tax extension fits neatly into that larger strategy.
Analysts warn against overreading any single policy. JP Morgan and others have tracked the shift for years. They note Apple initially aimed for 10 percent of production in India by the end of the first PLI period. It blew past that mark. Projections now eye 32 percent of unit assembly and 26 percent of value by 2027 in some forecasts. The Financial Express highlighted the 2041 horizon in its reporting, calling it a “major win” for tax certainty.
Suppliers notice. When foreign firms can park high-precision equipment with Indian partners without fear of permanent tax establishment, capital flows easier. When components enter bonded zones duty-free for export production, inventory costs shrink. When rules stay stable for a decade and a half, long-term contracts become realistic. These aren’t abstract gains. They translate into faster line ramps, higher yields and, ultimately, more iPhones stamped “Assembled in India.”
The parliamentary path ahead isn’t guaranteed. The draft must clear both houses. Debate could stretch months. Changes might appear. But the direction is clear. New Delhi intends to make India indispensable to Apple’s supply chain. Not just for older models. For the newest flagships too. Production of premium devices has already moved here. The latest policy tweaks aim to accelerate that transition further.
Apple’s own comments remain measured. The company points to its growing supplier base and export success without detailing future targets. Executives have praised the government’s responsiveness in private meetings. Publicly, the focus stays on quality, scale and meeting customer demand. Yet the numbers speak volumes. From near zero five years ago to one-quarter of global output today. The trajectory looks set to continue.
Other nations watch closely. Vietnam, Mexico and even the United States have courted Apple with their own packages. India combines a massive domestic market, improving infrastructure and aggressive policy. The latest proposal reinforces that mix. Certainty on taxes. Relief on duties. Support for services infrastructure. Officials aren’t leaving much to chance.
Whether the full extension survives debate, the signal has been sent. India plans to stay competitive. Apple appears ready to keep investing. The partnership, once tentative, now carries the weight of tens of billions in annual production. And both sides seem determined to make it last.