India proposes extending a tax exemption related to machinery and equipment supplied to contract manufacturers, according to reports citing a Reuters analysis. The incentive would apply to foreign companies and is aimed at firms that provide machinery used by contract manufacturers, including in export-oriented manufacturing zones. The draft proposal seen by multiple outlets would extend the exemption until 2041, adding 10 years to an earlier version introduced in February that was set to expire in 2031.
Several sources say the change is relevant to Apple’s iPhone production plans in India. Apple has reportedly lobbied against certain tax treatment that could otherwise arise from how machinery it owns is handled when supplied to contract manufacturers. Coverage describes the government concern as whether such arrangements could be viewed as creating a “business connection,” potentially exposing profits to tax.
While the proposal would expand the incentive’s timeline, all outlets note it is not yet law. The draft amendment still requires approval through India’s parliamentary process, including passage by both houses.
