India Proposes Tax Exemption Till 2041 for Apple, Foreign Firms
The government has proposed extending tax exemptions till 2041 for Apple and other foreign companies supplying machinery and components to manufacturers in India.
SociapaHQ
The Indian government has proposed to extend tax exemptions for foreign companies supplying machinery and components to contract manufacturers till March 31, 2041, to provide long-term tax certainty and strengthen the country’s manufacturing ecosystem.
The proposal is part of a draft amendment to the Income Tax Act, which will come into force only after parliament approves it.
The proposed extension is expected to benefit global technology companies like Apple, which has expanded its manufacturing operations in India as part of its strategy to diversify production beyond China.
Earlier this year the government announced a similar tax exemption to run until 2031. The latest proposal would extend the benefit for another 10 years.
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Tax Relief:
The measure addresses concerns that foreign companies might be liable to tax solely by reason of owning manufacturing equipment supplied to their contract manufacturing partners in India.
The government has also suggested extending tax exemptions on income earned by foreign companies from storing and supplying components used in the production of mobile phones, laptops, tablets, wearable devices and hearing equipment. The benefit would apply to operations in customs-bonded warehouses and in manufacturing facilities primarily serving exports.
The proposal could help companies build more resilient supply chains by allowing them to source critical equipment and components closer to their manufacturing facilities without incurring additional tax exposure.
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Investment Boost:
The draft legislation also has provisions to bolster India’s data centre ecosystem. Under the proposal, foreign companies with international customers through Indian data centres would be able to lease the facilities, instead of having to have local partners own them.
Industry observers believe the move could lower investment costs and make the sector more accessible to smaller operators.
In a separate proposal, the government has suggested introducing a 15-year tax exemption for foreign diamond mining and trading companies that sell rough diamonds through designated trading hubs in India, further reinforcing the country's position as a global hub for diamond processing.
