Apple’s contract manufacturing tax breaks in India could be extended to 2041
Reuters reports that a new draft amendment would extend by 10 years a tax break for foreign companies that supply machinery and equipment to contract manufacturers in India. Here are the details.
India is set to extend a tax break, currently valid until 2031, for another 10 years, according to a draft amendment reported by Reuters. This extension applies to foreign companies that supply machinery and equipment to contract manufacturers in the country, particularly those involved in producing mobile phones, tablets, laptops, and wearable electronic devices.
The tax exemption, initially set to expire in 2031, will now extend until 2041, benefiting manufacturers located in customs-bonded areas, which are considered outside India's customs border. Devices sold within India from these facilities will be subject to import taxes, making them primarily suitable for export. The move represents a significant victory for Apple, which had been advocating for the tax exemption since its introduction earlier this year, initially set to expire in 2031.
The extension follows recent reductions in import duties on several components used in smartphone and electronic device manufacturing, solidifying India's role in Apple's efforts to diversify its supply chain beyond China. India aims to produce 26% of the world's iPhones by 2026, up from 6% in 2020, according to Counterpoint Research data. For further details, refer to Reuters' full report.
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