As part of the Union Budget, the Indian government has proposed relaxing laws that previously taxed contract manufacturers of foreign companies for owning equipment. This comes as a win for Apple, Samsung and others that have manufacturing units in India, whether they are owned or through contract and manufacturing partners. The tech giant had previously lobbied the government to ensure that it doesn’t incur a tax burden for providing manufacturing equipment to its local partners Foxconn and Tata. Foxconn and Tata have invested billions in setting up plants to manufacture iPhones, but their expansion could be eased along if Apple was able to support them by providing some of the required equipment. However, under the Income Tax Act, 1961, manufacturing equipment within India owned by a foreign company can be treated as a “business connection”. Hence, Apple was concerned that it could incur taxes on the profits of its iPhone sales. Now, as part of the Union Budget for 2026-27, Finance Minister Nirmal Sitharaman announced that, “Any income arising on account of providing capital goods, equipment or tooling to a contract manufacturer, being a company resident in India, is eligible for exemption.” The exemption, under which Apple wouldn’t incur taxation… Read MoreInc42 Media
